Overseas mergers and acquisitions: Petrochemical companies set off another wave of experts to remind: how to integrate the purchase of resources is the biggest problem
At the beginning of the new year, some large petrochemical companies raised a new round of foreign mergers and acquisitions. On January 10, CNOOC once again made great efforts to acquire 45% of Nigeria's No. 130 offshore oil exploration license (OML130) with US$2.268 billion in cash. On January 17, China National Bluestar (Group) Corporation, a subsidiary of China National Chemical Corporation, completed the settlement of the French company Antis Group with a purchase price of 400 million euros (about 4 billion yuan) in Brussels, Belgium. This is the first case of overseas mergers and acquisitions in China's chemical industry and is also the largest deal for Chinese companies to acquire French companies. In addition, plans for overseas mergers and acquisitions by some large petrochemical companies are also in the making.
In 2005, the “going out†drama of Chinese oil company directors was successively staged, setting off an upsurge of Chinese outbound M&A. In 2006, the pace of overseas mergers and acquisitions by petrochemical companies will also accelerate. This is the consensus of the global economic community. A report by the Boston Consulting Group entitled "Toward the world stage: External acquisitions by Chinese companies" pointed out that Chinese companies' external mergers and acquisitions trend has been further strengthened, mainly driven by three factors. First of all, China’s continuously growing foreign exchange reserves can not only support external transactions, but also become a driving force for transactions. China’s foreign exchange reserves may reach 1 trillion US dollars in 2006; secondly, international private capital institutions are increasingly keen to support the bulk transactions of Chinese buyers; finally, Chinese consumers’ deposits tend to help state-owned banks to lower their capital prices. China's industry leaders have issued loans. The report predicts that these factors that drive growth in outbound M&A will not weaken in the future, but will increase further.
However, relevant experts pointed out that although the pace of mergers and acquisitions by Chinese companies has accelerated, China is still lagging behind in foreign mergers and acquisitions. Chinese companies are still a very small role in the world mergers and acquisitions stage. There is a 10-fold gap between M&A in Chinese companies and international standards. They believe that the integration of foreign companies is still the biggest challenge for overseas mergers and acquisitions by Chinese petrochemical companies. Globalization strategies, analysis of local markets, cultural barriers, and even political factors are all challenges faced by Chinese petrochemical companies in their acquisitions. The biggest risk facing Chinese companies in overseas mergers and acquisitions is the integration period. It is not difficult to buy a company with a deal with a foreign company. The difficulty lies in how to coordinate the relationship with local laborers and how to handle the relationship with consumers and partners.
Experts warn that oil companies should formulate viable oil mergers and acquisitions strategies to reduce arbitrariness and blindness. After the acquisition, resources should be quickly integrated, the success rate of integration should be improved, and benefits should be obtained as soon as possible to make up for the insufficiency of liquidity. It is forbidden to have all the troubles and peace of mind after mergers and acquisitions. Mergers and acquisitions companies must consider exporting a management team that is familiar with local industrial policies and acquisition laws as soon as possible, and timely handle the specific details of the acquisition, as well as issues of convergence, management innovation, and optimization of governance structures. After the completion of mergers and acquisitions, the company can operate well. It can not only achieve economies of scale, but also can effectively reduce costs and obtain huge profits. The sign of successful mergers and acquisitions is mainly the result of mergers and acquisitions, resulting in a more solid capital chain.
In 2005, the “going out†drama of Chinese oil company directors was successively staged, setting off an upsurge of Chinese outbound M&A. In 2006, the pace of overseas mergers and acquisitions by petrochemical companies will also accelerate. This is the consensus of the global economic community. A report by the Boston Consulting Group entitled "Toward the world stage: External acquisitions by Chinese companies" pointed out that Chinese companies' external mergers and acquisitions trend has been further strengthened, mainly driven by three factors. First of all, China’s continuously growing foreign exchange reserves can not only support external transactions, but also become a driving force for transactions. China’s foreign exchange reserves may reach 1 trillion US dollars in 2006; secondly, international private capital institutions are increasingly keen to support the bulk transactions of Chinese buyers; finally, Chinese consumers’ deposits tend to help state-owned banks to lower their capital prices. China's industry leaders have issued loans. The report predicts that these factors that drive growth in outbound M&A will not weaken in the future, but will increase further.
However, relevant experts pointed out that although the pace of mergers and acquisitions by Chinese companies has accelerated, China is still lagging behind in foreign mergers and acquisitions. Chinese companies are still a very small role in the world mergers and acquisitions stage. There is a 10-fold gap between M&A in Chinese companies and international standards. They believe that the integration of foreign companies is still the biggest challenge for overseas mergers and acquisitions by Chinese petrochemical companies. Globalization strategies, analysis of local markets, cultural barriers, and even political factors are all challenges faced by Chinese petrochemical companies in their acquisitions. The biggest risk facing Chinese companies in overseas mergers and acquisitions is the integration period. It is not difficult to buy a company with a deal with a foreign company. The difficulty lies in how to coordinate the relationship with local laborers and how to handle the relationship with consumers and partners.
Experts warn that oil companies should formulate viable oil mergers and acquisitions strategies to reduce arbitrariness and blindness. After the acquisition, resources should be quickly integrated, the success rate of integration should be improved, and benefits should be obtained as soon as possible to make up for the insufficiency of liquidity. It is forbidden to have all the troubles and peace of mind after mergers and acquisitions. Mergers and acquisitions companies must consider exporting a management team that is familiar with local industrial policies and acquisition laws as soon as possible, and timely handle the specific details of the acquisition, as well as issues of convergence, management innovation, and optimization of governance structures. After the completion of mergers and acquisitions, the company can operate well. It can not only achieve economies of scale, but also can effectively reduce costs and obtain huge profits. The sign of successful mergers and acquisitions is mainly the result of mergers and acquisitions, resulting in a more solid capital chain.