M&A in China continues to grow, despite challenging global economic conditions. Overall mergers activity in the mainland went up by 5 per cent in 2011 to 5,364 deals, the highest annual total ever, according to a report from PriceWaterhouseCoopers.
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Chinese state-owned enterprises and private companies are all joining in the trend of M&A. They need experienced and specialised help, such as good advisory firms that are independent from the deal and can advise on the technical issues.
Boutique Western advisors such as Moelis and Rothschild are eyeing up expansion in China. The former opened a Beijing office in November, and was mandated to advise Norway’s ELKEM AS on China National Chemical’s US$2.17bn acquisition of its silicon business, according to data provider Dealogic.
In contrast to the large investment banks, these firms typically employ five or so important senior people in China, alongside their more junior staff.
“IPO projects are becoming less promising, especially in the A-share market, however, these industries should have great growth potential in this coming year.”
Simon Lance, regional director, Hays China, says: “M&A, PE, VC and investment companies or departments are very attractive to lots of financial candidates in China, although skill shortages remain the main challenge. IPO projects are becoming less promising, especially in the A-share market, however, these industries should have great growth potential in this coming year. Positions in the front office are pretty hot.”
Most firms are open to hiring M&A talent – the main factors they consider are experience and existing client networks. “Quality candidates from the big four and local accounting firms are in high demand. In addition, some big MNCs have M&A or IPO auditing departments that need good candidates. People with overseas experience in these areas are sought after as well,” adds Lance.
Boutique firms are poaching professionals from large rivals, such as JP Morgan and Goldman Sachs, but they are finding it difficult. Lance says good candidates typically prefer to work for the major players because of the size of their potential deals. But a comparatively flat hierarchy, and more responsibility, flexibility and growth potential can attract candidates to smaller firms.