China International Capital Corp is the strongest Chinese investment mergers and acquisition adviser for Chinese state-owned companies, according to research firm Dealogic. In the 12 months between June 2017 and May 2018, the Beijing-based investment bank advised on 58 deals with a total value of $80.6 billion, the highest number of deals and the largest deal value among Chinese investment banks.
Led by chief executive Bi Mingjian and founded in 1995 by a joint initiative by China Construction Bank and Morgan Stanley, CICC is also China’s oldest joint-venture investment bank and the first in China to emulate the practices of global investment banks. In the last year in particular, CICC has advised on a number of landmark offshore deals.
One stand-out last year occurred when its bankers acted as joint financial advisers for Yanzhou Coal Mining for acquisitions in Australia. Yancoal Australia, a subsidiary of the Chinese coal firm, successfully completed its $2.5 billion equity issuance on the Australia stock exchange to fund its acquisition of Coal & Allied from Rio Tinto in September last year. The issuance was the first ever ASX market equity-raising conducted by a Chinese investment bank – an exercise that required CICC to meet all Australian regulatory and compliance procedures.
Alongside this main transaction, CICC helped Yancoal to sell 49% of one of Coal & Allied’s key mining assets, Hunter Valley Operations, or HVO, to Glencore. Glencore further subscribed to $300 million in Yancoal’s equity issuance and became a strategic investor in Yancoal.
The acquisition ranks as the largest in size among Chinese companies’ acquisitions in Australia since 2014 and the second-largest in size in Australia in 2017. Furthermore, Yancoal’s $2.5 billion equity issuance is the biggest in value among ASX-listed issues with Chinese controlling shareholders, and the highest in value in ASX equity issuance since 2016.
In July 2017, CICC acted as the sole adviser to a Chinese consortium in the $11.6 billion acquisition and privatization of Singapore-listed Asia warehousing giant, Global Logistic Properties. The deal was made possible by the fact that Global Logistic’s largest shareholder was Singapore sovereign wealth fund GIC, which approved of the sale to the consortium of Chinese investors, among them real estate developer China Vanke, private equity house Hopu Investment Management, fund manager Hillhouse Capital Group, and Global Logistic’s chief executive Ming Mei.
CICC is also branching out to include foreign clients: chief among them is Russian aluminium firm United Company Rusal. CICC helped Rusal with its 2017 non-public issuance of corporate bonds (a second tranche) last year in September, with the sale of Rmb1 billion ($145 million) of panda bonds on the Shanghai stock exchange. CICC acted as the sole underwriter and bookrunner for the transaction, a milestone event in China’s capital market for issuers from Russia, Brics countries, and the BRI region.