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Four overseas mergers & acquisitions deals were made, each in Europe Beijing, 20 Sep 2016
- According to PwC's MoneyTree™ China Renewable and Cleantech Investment Report (Q2 2016)
(the “Report”), China's renewable energy and cleantech industry saw 27 M&A deals in Q2 2016. The domestic deals together with 4 overseas M&A deals marked a turning point from the previous three consecutive quarters, with Q2 experiencing a 28.6% increase in the number of M&A deals made. However, the disclosure of M&A deals in the industry amounted to a total of USD 700 million, which represented a slight drop from Q1.
In Q2 2016, a total of 35 PE/VC investments were made, with the amount of investments totalling USD 396 million. These included 20 deals within the environmental protection sector, 13 deals in the new energy sector, and 2 deals in the new material sector. Also of note, 5 companies listed on the main board and 14 companies financed via the NEEQ secured access to financing. The investment rounds which give target placements predominantly for relatively mature companies listed on the NEEQ and main board, represented 54.3% of the total amount of investment deals. Based on the investment amount, the proportion of deals in the PIPE round rose to make up 64.4% of the total.
Lisa Wang, PwC China Power & Utilities Partner noted, “in Q2 2016 both the number of deals and amount invested from PE/VC focused predominantly on the relatively mature developing enterprises such as those listed on the NEEQ and other listed companies. This trend reflected investor optimism in renewable energy and cleantech industry development. For these relatively mature enterprises, the goal remains to raise capital for new projects and business opportunities concentrated in areas such as sewage treatment, solar power station construction, and waste disposal.”
In Q2, the number of overseas M&A deals within the renewable energy and cleantech industry increased to 4. The target location for the deals was Europe, with the deals having occurred in Germany, Italy, Austria, and the UK. Commenting on the trend, Ms. Wang said, “Successes in overseas M&A will help China promote its experience with advanced international technology and management in the renewable energy and cleantech industry. This in turn should aid further expansion in the international market, leading to increasing opportunities for development across the industry. We expect that this trend will continue to advance.”
With regard to the environmental protection industry, merger deals had risen, with 20 deals over the period, including 3 new energy sector deals and 4 new material sector deals. Further, the M&A deals in the new energy sector accounted for 36.8% of the total investment value over the period, indicating there had been a few deals making a large amount in the sector.
As a consequence of fluctuations in China’s capital markets and IPO approval queue, no IPOs occurred in Q2 2016, in China’s renewable energy and cleantech industry. However, enterprises from various sub-sectors are lining up to list, a trend which indicates China’s capital market still retains major appeal for renewable energy and cleantech enterprises.
Download the full report and see more details at: http://www.pwccn.com/home/chi/moneytree_cleantech_sep2016_chi.html Definition and classification of renewable energy and cleantech sectors in the report:
||Environmental protection sector covers energy saving and environmental protection: |
Energy saving refers to all products, equipment, technologies and services for saving energy or improving energy efficiency, such as smart power grids, LED, new energy automobiles, energy-saving services and other energy-or-electricity-saving products and technologies.
Environmental protection refers to water/sewage treatment, air/environment protection, solid waste management, noise abatement, soil protection, online environmental monitoring systems, etc.
||New energy mainly refers to non-fossil energy, including distributed energy resources and renewable energy sources (hydro power projects excluded), such as solar energy, wind energy, biomass energy, nuclear energy, etc. |
||New materials include novel functional materials, high performance structural materials, ultrafine powder, nanometer materials, etc. |
||Industry origins are not disclosed. |