Thursday, January 24, 2013

Mergers and Acquisition, Partnering and Private Equity Investment Trends in China in 2012

In 2012, Private Equity / Venture Capital Investments in China grew by a whooping 65 percent to reach $946million. The average deal size was $49million, which is much bigger than $7 to $8million observed in the US. Majority of the VC investments went into drug companies. 64 percent of the VC investment were into drug companies.

The total value of IPOs in 2012 was $1.38 billion, as against $5.22 billion in 2011. The average deal size fell 40% to $112 million from $174 million the previous year. The lower results derived as much from general market conditions as they did from any problems specific to pharma.

M&A Trends in China - 2012

Pharma was the driver of M&A transactions in China  in 2012, as 54 percent of the deals were happened in the pharma sector.  The largest M&A transaction last year was the $1.1 billion spent by China Pharmaceutical Group to acquire Robust Sun Holdings Limited.

In 2012, M&A Transactions totalling over $4 billion were executed in China.  This is just  9% increase when compared to 2011, the larger difference was due to deal size. The average deal was $116 million last year, versus just $65 million in 2011

Partnering Deals in China

Partnering deals totalling $558m were signed in 2012, which wasa 100 percent jump over 2011. The average deal size was $25m, which as well was double compared to 2011. Drug development saw the most demand as 77 percent of the deals were with drug development companies. There is growing global interest in China, as 87 percent of the deals were cross border transactions.