Chinese M&A: Record Levels And New Frontiers

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The news that China National Petroleum Corp (CNPC) is in discussions to acquire Argentinean oil and gas exploration company, YPF, from Repsol YPF means that Chinese outbound acquisitions could yet reach record levels in 2009, and illuminates several key trends that will lie at the heart of China's long-term M&A strategy. Repsol YPF said on July 1 that it had received several offers from companies in China, India and Russia for a stake in its Argentine unit Yacimientos Petrolíferos Fiscales (YPF). According to a same-day report in the South China Morning Post, China National Petroleum Corporation (CNPC) and China National National Offshore Oil Corporation (CNC) are among the companies interested in the YPF stake, with CNPC seeking to launch a bid for as much as 75% of YPF (valued at US$12.4bn, based on YPF's previous day trading price).