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On this day, 17/11/2011 I was at a conference where a banking firm presented an article that became of interest to me. The article was “Banking on China Wall Street Waking up to M& A potential” and was published Keri Geiger Dow Jones News Wire on 26 August 2005. The major area of interest brought to light by the presenter was that, there was increasing M & A activity in China catching the attention of foreign investors to Chinese markets. In fact, the presentation enlightened me on the venture of China National Offshore Oil Company (CNOOOC) whereby the company placed a bid worth US $ 18.5 billion for Union Oil Company of California (Unocal). However, CNCOOC lost the bid for Unocal to Chevron Corporation due to political and governmental pressures by the United States.
Since you gave me the opportunity to attend the presentation your behalf, I am going to highlight some of the background information concerning the presentation. First, the presentation brought to attention the issue of International acquisition, which is a form of foreign direct investment (FDI). The main advantage of international acquisition is that it offers immediate expansion for a business organization. The presenters pointed out that, private-equity firms see M & A in China as a way to unlock and create value since they already have more money that they can use to make a wide variety of transactions.
Recently, we had a meeting in which we came up with a strategy to achieve international acquisition through venture capital approach in order to expanding our banking services to China which has a vas quick growing equities and securities market hence a major player in the global economy. The presentation gave me the idea that, it would be best for us to launch our strategy to enter Chinese banking since the article mention that investors around the world were seeking to invest in China’s M & A as well as the private equity. This is an indication that investors have gained confidence to invest in China to create value for themselves since the M & A market is fast developing. In this case, Chinas economy has remained strong in spite of international economic crisis and social unrest. Thus, China’s economy is attractive otherwise; they would have turned away long ago.