April 14, 2021

Market Spotlight: How to power the world's economic powerhouse in APAC

By Desmond Chua, Head of Region, APAC, Datasite


In the wake of the COVID-19 pandemic, China has firmly cemented itself (again) as the world’s pre-eminent growth engine. Strict virus containment measures implemented early in the crisis precipitated a rapid and more robust recovery in Chinese consumer activity late in 2020, as well as a marked rebound in demand for energy and natural resources.

How China’s energy market evolves in the years to come as its economy continues to mature will be critically important not only for the country itself, but for all of APAC.

Bearing this in mind, the clutch of deals announced in late July involving China Oil & Gas Pipeline Network Corporation (PipeChina), a state-owned enterprise formed in December 2019, may reveal much about the country’s energy future.

As highlighted in our new Deal Drivers: APAC FY 2020 report, China was behind five of APAC’s biggest energy, mining & utilities (EMU) deals in 2020.

Consolidating major state energy assets

The largest EMU deal, and the biggest deal in APAC across all sectors in 2020, was the above-named PipeChina acquisition of more than a dozen major oil and gas pipeline assets from PetroChina for almost US$50bn.

The transactions saw PipeChina acquire a cornucopia of pipelines and storage facilities from PetroChina and Sinopec, also state-owned energy companies. The incredible extent of this industry restructuring augurs well for future spin-offs of pipeline assets.

After its quartet of purchases in July, PipeChina went on to make another multibillion-dollar acquisition only a few months later, this time involving Hong Kong-listed Kunlun Energy, as it continued to consolidate ownership of crucial midstream oil and gas infrastructure. By that time, hundreds of companies had already registered for shipping licenses allowing them to use the companies’ pipelines and liquid natural gas terminals.

Natural gas to power the future

Looking ahead, it is clear that natural gas will play a large role in China’s future. The state has said it intends for the economy to become carbon neutral by 2060, with natural gas a key element of plans to mitigate air pollution and wean the country off coal.

Being mindful of this, reforms to improve the competitiveness of China’s gas and cleaner-energy markets and promote investment, such as the development of PipeChina, will in all likelihood become more and more frequent.

Deal Drivers: APAC FY 2020

What other APAC M&A deals made the headlines last year? Which sectors and countries saw the top bidders and values? Where do the opportunities lie going forward?


There's More...

If you'd like to see how M&A has fared around the world, check out our other Deal Drivers reports from EMEA, APAC, and the Americas to gain the latest insight into dealmaking.


Ready to Get Started?

You may also like:

Market Spotlight: Hong Kong IPOs set to crawl out of Q2 lows in months to come

Emerging out of the winter of the global pandemic, the summer of 2021 saw renewed activity in the global IPO market. The total amount raised through IPOs by Asian companies expanded exponentially year-on-year in the first half of the year, reaching US$85.4 billion. Learn more in this market spotlight on IPO deal momentum in China and Hong Kong.

Grow Big or Go Home: M&A Acceleration in the US Tech Industry

The explosive growth of the tech industry has created a wealth of opportunities for mergers and acquisitions. Read the highlights from several technology expert panelists sharing their forecasts for the future in tech on our recent live sector spotlight webinar US Tech Opportunities, presented with Mergermarket.

Male Professional Working at Laptop PC on Rooftop
5 Things You Didn't Know a Data Room Could Do for You

The latest and greatest software features aren’t just for your phone anymore. In the face of longer, more complex deals, the data room industry continues to innovate.

Shanghai China city aerial