A State-owned Assets Supervision and Administration Commission official said on December 19 that the Commission has chosen 10 companies to enter the field of overseas mergers and acquisition.
"I think it makes sense that state-owned companies should enter international markets to open up access to overseas resources, because the price of commodities is falling sharply in these markets," said Wang Xiaoqi, a section director of the State-owned Assets Supervision and Administration Commission (SASAC), at a December 19 forum, as reported in 21st Century Business Herald.
Plans to exploit and develop mineral resources in international markets should based on a single long-term national strategy, Wang emphasized.
He suggested China give policy support to state-owned enterprises to undertake mergers with overseas resource-based companies. In addition, restrictions on overseas mergers and acquisitions should be eased for companies in key areas, and financial supports should be available, Wang said. "10 companies have been chosen by SASAC to enter the field of overseas mergers and acquisition," revealed Wang.
The attraction of overseas mergers and acquisitions to domestic companies is likely to cause fierce rivalry between companies competing for access to this right. It is therefore essential that decisions are based on a nationwide long-term strategy.
Wang Xiaoqi believes China can profit from the example of Japan's experience in overseas mergers and acquisitions – companies can build a long-term supply strategy that cushions them against the impact of international price fluctuations.
(China.org.cn by Wu Huanshu, December 23, 2008)
