Posted on April 26, 2010 at 5:04 PM
So far in 2010, Asia has seen considerable growth in funds, including BoCom's (Bank of Communications) announcement this February of its aim to raise $250 to $500 million in the three months for a China private equity fund. This would be the largest fund raising effort by a mainland company since 2007.
IPOs have also continued its positive growth into 2010; here are a few notable and recent IPO deals in 2010:
Origene Technologies Inc, a leading gene-centric life sciences company, has raised US$16 million dollars to build the largest collection of monoclonal antibodies, covering almost the entire human genome. The Series B financing was led by IDG-Accel, SBI & TH Venture Capital Enterprise and Zero2IPO.
Guanzhou Broad Vision has recently completed the second round financing, giving the Guangdong based high-tech company access to venture capital totaling RMB 15 million.
Advanced Micro-Fabrication Equipment, Inc. (AMEC) has closed its Series D financing round on March 11, securing the Asia based semiconductor company $46 million from investors. AMEC has raised over $150 million from venture capital sources since its inception in 2004 and has remained strong through the economic downturn.
OrbiMed, the world's largest bio-medical focused investment company, announced on March 8th the equity acquisition of Time Angel Medical Instruments, a leading China-based dental equipment provider, for approximately $6.6 million. With the investment, the two companies will be making a joint effort to expand further in China.
China-based mobile telecommunications company, Hantele Telecom Science & Technology, has closed its second round of financing securing an investment of CNY 55million. Sequoia Capital, Asia Business and several other undisclosed investors led the investment, which will be used for increased market expansion and R&D across China.
Chinese Private Equity Firm, Hopu Investments, has advised the Argentinean Firm, Bridas Energy Holdings, on its oil and gas production joint venture with Cnooc LTD, valued at US$3.1 billion. This is Hopu's first advisory deal and the firm has been looking to expand outside of private equity, much in the way of Blackstone Group, through focusing on large state-owned enterprises looking to do IPO and large acquisition deals.
As we've already seen in 2010, some of the biggest deals in 2009 were IPOs. Haiwen & Partners represented China State Construction Engineering Company (CSCEC), China's largest construction company, in a $6 billion IPO on the Shanghai Stock Exchange, the largest A-share IPO since 2007, and the country's fifth-largest IPO ever. Freshfields Bruckhaus Deringer came up strong with two of the largest IPOs on the Hong Kong Stock Exchange this year, representing China Minsheng Bank on their $3.9 billion listing and Sands China on their equity deal of the year with a winning listing worth $2.5 billion.
Morrison & Foerster's Hong Kong office represented UBS, JPMorgan, and CITIC in a $1.3 billion IPO of China Zhongwang, one of Asia's biggest manufacturers of extruded aluminum products. The deal made Zhongwang's chairman into one of China's richest people. For a complete list of the top IPOs in HK and Shanghai, please see the list below.
Top 10 IPOs of 2009 HKSE (HK$ millions) China Minsheng Banking Corp raised HK$ 30,161 -- Nov 2009 China Pacific Insurance Group raised HK$ 24,042 -- Dec 2009 Sands China HK$19,41130 Nov 2009 Metallurgical Corporation of China raised HK$18,231 -- Sep 2009 China Longyuan Power Group raised HK$17,486 -- Dec 2009 Wynn Macau raised HK$14,4909 -- Oct 2009 Glorious Property Holdings raised HK$10,545 -- Oct 2009 Sinopharm Group HK$10,041 - Sep 2009 China Zhongwang raised HK$9,8448 -- May 2009 Longfor Properties raised HK$8,13119 -- Nov 2009
Top IPOs of 2009 - Shanghai & Shenzhen Stock Exchange (RMB millions) China State Construction raised RMB 50,160 -- Jul 2009 Metallurgical Corp of China raised RMB 18,970 -- Sep 2009 China Shipbuilding Industry Corp raised RMB 14,723 -- Dec 2009 China CNR Corp raised RMB13,932 -- Dec 2009 China Merchants Securities raised RMB11,115 -- Nov 2009 China Everbright Securities raised RMB10,962 -- Aug 2009 Jiangsu Tanghe Brewery raised RMB2,700 -- Nov 2009 China International Travel raised RMB2,592 -- Oct 2009 Beijing Ultrapower Software raised RMB1,833 -- Oct 2009 Sichuan Express Company raised RMB1,800 -- Jul 2009
M&A was more active in the first two quarters of the year, with Clifford Chance in on top deals between China Minmetals/OzMetals as well as Delta/Buma and Royal Group/Millicom. Davis Polk & Wardwell represented Nikko Cordial Securities in its sale to Sumitomo Mitsui.
In Tokyo, Paul Weiss represented Citigroup on its $10 billion acquisition of 100% of Nikko Cordial Corporation, the largest acquisition in history of a Japanese company by a non-Japanese firm. Citigroup was busy, selling its stake in Nikko Cordial Securities to Japan's third-largest bank Sumitomo Mitsui for $8.7 billion, which included its retained cash and debt payments. The deal marked a major realignment in Japan's financial sector, as Simitomo Mitsui was the first Japanese bank to buy a top brokerage in Japan.
Competition between three of Japan's top brewers- Kirin, Asahi and Suntory- showed great intensity in 2009, with Asahi purchasing 20% of China's Tsingtao brewery, while Kirin responded with a 20% acquisition in San Miguel Brewery in the Philippines. Despite the possible $43 billion merger between Kirin and Suntory falling through in February of 2010, the competition between the beer houses appears to remain steady as the companies expand internationally.
In the sub-category of M&A, energy acquisitions were an especially active area, including the PetroChina Co. purchase a 45.5% stake in Singapore Petroleum for a total cost of US$1.02 billion. Singapore firm Drew & Napier advised PetroChina on the deal, which was completed in June 2009 after a conditional agreement in May.
Another notable tie up included the controversial joint venture between mining giants Rio Tinto and BHP Billiton, which was agreed upon in June, just hours after Rio Tinto walked away from its alliance with Chinalco. The deal valued at over $10 billion has continued to draw controversy over monopoly claims throughout the year. Allens Arthur Robinson represented Rio Tinto while Blake Dawson represented BHP in the JV.
Freshfields Bruckhaus Deringer advised Sinochem Resources UK Limited on its acquisition of Emerald Energy Pic, for $876.6 million. Sinochem, a Chinese state-owned enterprise deals in energy, agriculture, chemicals, finance and real estate, should coincide well with Emerald Energy's oil and gas exploration and production work.
Baker & McKenzie advised Yanzhou Coal Mining Company Limited on its issued share capita acquisition (100%) in Australia-based mining firm Felix Resources Limited. The transaction, which was worth US$3.07 billion (A$3.33 b), was one of the largest acquisitions by a PRC company in Australia, and the largest investment in the Australian mining and natural resources sector.
China-based Sinopec International Petroleum Exploration (SIPC) acquired publicly-traded (in London and Toronto) Addax Petroleum in an $8 billion takeover. Vinson & Elkins advised on the deal, which was the largest overseas takeover by a Chinese oil company and broke the record set by China National Petroleum in 2005.
Top private equity deals included Sullivan & Cromwell, Simpson Thacher & Bartlett, and Paul Hastings Janofsky & Walker, helping to represent KKR and Affinity/Oriental Brewery, and Freshfields and Sidley Austin's involvement in the Warburg Pincus/Transpacific Industries deal.
Equity deals saw Baker & McKenzie representing BW Plantation on an IPO, and Cleary Gottlieb Steen & Hamilton on the introduction of Hutchison Telecommunications. Structured finance deals included a ticket receivables deal with Asian Airlines that involved O'Melveny & Myers and Orrick Herrington & Sutcliffe. Allen & Overy and O'Melveny assisted with an IBK structured note deal as well.
Shearman & Sterling advised on the IFLR debt and equity deal of the year with the $100 million bond offering of Vincom Joint Stock. The offering was the first overseas sale of convertible bonds by a Vietnamese issuer and is also the first international capital raising from any Vietnamese issuer since 2005.
Restructuring deals of the year included the Asia Aluminum deal, which involved Allen & Overy, Baker & McKenzie, and Davis Polk & Wardwell; and FerroChina was represented by Clifford Chance. Debt and equity-linked deals of the year included the Bank of East Asia core capital deal (involving Clifford Chance and Linklaters); and Indika senior notes deal (with Allen & Overy and Davis Polk, as well as Sidley Austin).
China's telecom industry was restructured with China Unicom's $15.8 billion sale of CDMA to China Telecom and its $23.8 billion merger with China Netcom, a deal that involved Commerce & Finance Law Office, Freshfields Bruckhaus Deringer, Jingtian & Gongcheng, Sullivan & Cromwell LLP and Linklaters
In the structured finance deal of the year, South Korea's top lender, Kookman Bank, raised $1 billion dollars in Asia's first covered bond. Clifford Chance and Allen & Overy played key roles in the transaction along with Korean firms Shin & Kim and Kim & Chang.
In top project finance deals, Latham & Watkins, Skadden Arps, and Mayer Brown assisted in the $2.5 billion project financing and subsequent restructuring of the Paiton 3 power plant expansion in Indonesia.
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