A report by international accountant Ernst & Young found that mergers and acquisitions in the mineral and mining sector by Chinese buyers on the overseas market in 2010 were challenged greatly by contenders from other emerging markets, particularly India.
It says that Chinese companies made no more than 13 billion U.S. dollars of mergers and acquisitions in minerals and mining in 2010, a drop of 20 percent from 2009. And 4.5 billion U.S. dollars is for overseas deals, a more drastic plunge of 55 percent and 100 million U.S. dollars less than the amount made by Indian companies.
Internationally, 1,123 mergers and acquisitions with a total worth of 113.7 billion U.S. dollars took place in the mining industry in 2010, with China only accounting for 11 percent of the number of cases and 7 percent of the value, according to the report. Canada, Australia, India and Brazil are leaders on the list.
In the analysis made by Ernst & Young, mining companies are recovering from the aftermath of the global financial crisis and are less hungry for extra capital input. That makes Chinese companies with stronger financial position than other competitors less attractive.
In a statistics by Deloitte, another big international accounting and consulting firm, China's venture into the overseas mining sector via mergers and acquisitions had been gaining ground significantly since 2006 and peaked in 2009 despite the global economic recession.
Analysts attribute the increasingly aggressive steps by Indian and Brazilian companies to the fast economic growth there. In India, for example, the growth is largely built on the boom in infrastructure construction, which means huge demand for iron and steel.
In the meantime, acquisition attempts by Chinese bidders are increasingly facing doubts from the host countries due to the state-run background of the Chinese companies, the less diversified investment interests and the lavish offers of Chinese mining giants.
By Li Jia, People's Daily Online
Weekly review
It says that Chinese companies made no more than 13 billion U.S. dollars of mergers and acquisitions in minerals and mining in 2010, a drop of 20 percent from 2009. And 4.5 billion U.S. dollars is for overseas deals, a more drastic plunge of 55 percent and 100 million U.S. dollars less than the amount made by Indian companies.
Internationally, 1,123 mergers and acquisitions with a total worth of 113.7 billion U.S. dollars took place in the mining industry in 2010, with China only accounting for 11 percent of the number of cases and 7 percent of the value, according to the report. Canada, Australia, India and Brazil are leaders on the list.
In the analysis made by Ernst & Young, mining companies are recovering from the aftermath of the global financial crisis and are less hungry for extra capital input. That makes Chinese companies with stronger financial position than other competitors less attractive.
In a statistics by Deloitte, another big international accounting and consulting firm, China's venture into the overseas mining sector via mergers and acquisitions had been gaining ground significantly since 2006 and peaked in 2009 despite the global economic recession.
Analysts attribute the increasingly aggressive steps by Indian and Brazilian companies to the fast economic growth there. In India, for example, the growth is largely built on the boom in infrastructure construction, which means huge demand for iron and steel.
In the meantime, acquisition attempts by Chinese bidders are increasingly facing doubts from the host countries due to the state-run background of the Chinese companies, the less diversified investment interests and the lavish offers of Chinese mining giants.
By Li Jia, People's Daily Online
Weekly review
