How to overseas mergers?CICC Hong Kong considers this way

On September 22, at the 2022 (24th) Overseas Investment Experience Sharing Forum at the China International Mining Conference, Tong Junhu, Secretary of the Party Committee and General Manager of China Gold Group Hong Kong Co., Ltd. said that Chinese companies should expand overseas Keep calm, carefully analyze the situation and formulate mid -term planning, and formulate relevant policies in targeted manner.

In 2021, the top 40 mergers and acquisitions of the top 40 in the world's top 40 increased by 60%over 2020. Among them, gold is the main driving force of trading activities, accounting for about 70%of the total value. Due to the high price of gold, the main gold producer's debt level is low, the cash level is high, and it is at the favorable level of mergers and acquisitions. In addition to gold -related mergers and acquisitions, key mineral mergers and acquisitions have risen significantly. Compared with 2020, the value of key mineral transactions in the top 40 in the world's top 40 has doubled, and the number of transactions has increased by more than 5 times.

Scouts pointed out that the main cause of large -scale high -quality mining mergers and acquisitions is to expand the scope of business to enter the international market and expand the business sector to enhance the ability to resist risks. The second is to strengthen the current business segment and increase the right to speak. The third is to integrate resources, strong and union, from competition to cooperation, to achieve the effect of "1 plus 1 greater than 2".

From the third quarter of 2016 to 2021, Chinese companies' overseas transactions were traded in 52 countries and regions a total of 246 transactions. Scouts pointed out that in the past few years, Chinese companies have rapidly grown into the backbone of the global mining trading market that cannot be ignored in the global mining trading market, and has frequently shot frequently in mature mining areas in developed countries and regions in North America and Australia. The external reason for Chinese companies to go out is that China has continued for nearly 40 years of high -speed growth, resources consumption is large, domestic resources are currently lacking, and large and high -quality resources are getting less and less. At the same time, many mining companies now propose to become a first -class mining company internationally, so this has also become the internal driving force for "going global".

In recent years, China Gold Group Co., Ltd. has actively promoted its strategic transformation, proposed a strategic goal of high -quality development, excellent and stronger, stronger and bigger, and unswervingly building a world -class multinational company's strategic goal, and actively "go global" to practice the "Belt "All Road" initiative. As of now, China Gold Group has successfully completed 4 overseas equity acquisition projects, mainly distributed in Kyrgyzstan, Congo (cloth) and Russia.

Scouts shared the main risks faced in overseas mergers and acquisitions, and especially emphasized the need to put the risks and nationalist risks of the country to the first place. State, pay attention to prevent risks. In addition, environmental risks and community risks should also pay attention to prevention.

Scouts said that there are three main problems facing overseas resources.

The first is to use the "two markets and two resources" capabilities to be strengthened. The development of overseas resources in China is late, and the global monopoly pattern of important resources has been formed. Under the monopoly environment, the number of overseas projects in Chinese mining companies is still in a relatively backward position compared with the number of production projects and western mining countries. Mining enterprises urgently need to break the monopoly of mining enterprises in developed countries, strengthen the use of "two markets and two resources" capabilities to improve Chinese enterprises' ability to develop overseas resources.

The second is insufficient talent reserves. Compared with the mature global mining companies in the West, Chinese mining companies do not lack professional talents, but there are management talents with strategic, theory, and practice in their shortcomings. Especially after completing the mergers and acquisitions of overseas projects, the lack of management talents that can quickly integrate into the country where they are located and know how to survive overseas.

The third is the lack of overseas publicity and public relations capabilities. Due to language and culture, the international community generally lacks cognition and recognition of Chinese companies, and Chinese mining companies lack their ability to promote their ability on the international stage. Regardless of whether the Overseas M & A project or after the mergers and acquisitions are completed, once the public opinion crisis occurs, Chinese companies often cannot respond well.

How Chinese enterprises have better conduct overseas resources mergers and acquisitions and development. Scouting believes that one is to strengthen the international situation and national risks to research and judge, do due diligence, and choose a standard project. The second is to use the high level of international technology, finance and legal consulting companies to effectively avoid investment risks. The third is to pay attention to environmental protection, do a good job of community relations, and implement localized operations. The fourth is to attach importance to the construction of local infrastructure and downstream industrial chain. Fifth, try to cooperate with "going to the sea" as much as possible to avoid fighting alone. Sixth, industrial cooperation -the entire industry chain "go out"

Scouts said that the overseas layout of mineral resources requires both strong economic strength courage and superb overseas investment management capabilities and technologies. "Our country is now open and open, so we have the same to enterprises. We must have an open mindset and concept, and cooperate with the world's excellent mining companies and fund institutions to win a win -win situation."

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