On 10 May, 2017, PwC established a transaction services team in Qingdao, to support the growing need for professional transaction services in Shandong Province and its surrounding areas. The new team will integrate PwC’s global resources, competencies, innovative thinking and cutting-edge technology to provide the most needed transaction solutions to companies in and around Shandong.
Acknowledging this latest development, Xu Jian, Deputy Director-General of the Qingdao Bureau of Commerce, Kevin Zhang, PwC China Shandong Lead Partner, David Brown, PwC’s Transaction Services Leader, Asia Pacific, and Leon Qian, PwC Northern China Transaction Services Leader attended the opening ceremony. During the event, PwC also launched the 2014 to 2016 Shandong M&A Review and Outlook in conjunction with the Bureau of Commerce, Qingdao. The publication covers the latest M&A trends pertaining to Shandong and includes insights for companies involved in M&A deals.
According to PwC’s report, the M&A market in Shandong Province maintained rapid growth from 2014 to 2016. As of 2016, the total number of transactions amounted to 311, with a total deal value of RMB 284.1 billion. Over the period, the percentage of the national total increased from 2.62% in 2014 to 5.35% in 2016. The value of cross border and trans-provincial deal transactions for Shandong Province reached RMB 226.92 billion, which was 7 times greater than in 2014. Between 2014 and 2016, private enterprises were the leading investors for Shandong’s M&A market, though there was also a continual increase in SOE’s investing in M&A deals, which made up 49% of the deal value in 2016, reaching RMB 129.29 billion, almost 4.9 times higher than in 2014.
Investments in Shandong enterprises have been predominantly made in companies located in the Shandong Peninsula Blue Economic Zone and central Shandong region, which account for 95% of the local investment value. Private enterprises were more common investment targets than SOEs over the period. Additionally, domestic investment targets were more common than international targets between 2014 and 2015. However, overseas investments have grown in prominence, reaching a value of RMB 81.18 billion, and accounting for 73% of the total value in 2016. Indeed, the rising scale of investments by Shandong enterprises in overseas markets is reflected by the average deal size reaching RMB 15 billion.