China’s Top Investment Bank to Revamp Government State Owned Sector
The country’s top domestic investment bank, China International Capital Corporation is aiming to participate in a much as $60 billion in M&A deals this year that is driven by the government plan to revamp is State owned sector. CICC have a long term relationship with big traditional State owned enterprises since they handled most of their capital market listings. The government also trusts CICC capability in overseeing important industrial restructuring of State owned firms
Beijing based banks 25 domestic M&A deals last year have a total value of $52 billion accounting for 15 percent of the $347 billion market. For 2015, the total deal volume expected to grow more than 15 percent or $400 billion and CICC might get involved in much as 50 domestic and offshore deals based on Thomson Reuters calculations.
Established in 1995, CICC was a joint venture between China Construction Bank Corp and Morgan Stanley through a U.S. investment bank that sold 34 percent of its shares in 2010 to KKR & Co., TPG Capital Management, GIC and Great Eastern Life Assurance Co Ltd. for 16 months since China’s President XI Jinping called for the measures to diversify ownership and to improve management of the State Firms, M&A transactions have continued to increase and generate significant business for leading banks.
Then in the past three years CICC participated in transactions of more than $86 billion in China’s domestic M&A market, in which CITIC Securities Co Ltd have completed more deals in dollar value terms. The government is still mulling its SOE reform policies that is expected to lead to greater consolidation of state industry and allows the participation of more non state and private investment.