Asia deals round-up: M&A activity in the financial and natural resources sectors

The past week has seen a flurry of firms working on large M&A transactions across Asia Pacific, including HSBC’s sale of its general insurance business to Axa and QBE, and China Guangdong Nuclear Power Group’s $2.4bn bid for Australian mining company Extract Resources.

HSBC and its Hong Kong subsidiary Hang Seng Bank have agreed to sell their general insurance businesses in Hong Kong, Singapore, Argentina and Mexico in a split deal between Axa of France and QBE of Australia.

Axa Group will pay $494m for HSBC’s general insurance businesses in Hong Kong, mainland China, Singapore, India and Indonesia and property and casualty insurance businesses in Mexico.

Australian insurance group QBE has agreed to pay $420m for the general insurance businesses of HSBC in Argentina and of Hang Seng Bank in Hong Kong and mainland China.

Clifford Chance, led by Hong Kong-based Asia head of corporate Roger Denny, advised HSBC and Hang Seng Bank on the sale. Hong Kong partner Amy Ho, Singapore partner Lee Taylor and London partners Alex Erasmus and Tim Page also worked alongside Denny on the deal.

Denny and his M&A team also represented HSBC in the sale of Asian wholesale bank notes business to Singapore-based United Overseas Bank in 2010.

Singaporean firm Selvam, the JLV partner of US firm Duane Morris, advised the seller on the Singapore law aspects.

Axa sought out its longstanding international adviser Linklaters and Singapore counsel Rajah & Tann to act on the deal. Linklaters Hong Kong partner Robert Cleaver together with London partner Dan Schuster-Woldan headed the firm’s team. Rajah & Tann’s transaction team was headed by partners Serene Yeo, Cheng Yoke Ping and Elaine Tay.

Kennedys is understood to be representing QBE in this transaction.

Away from the financial sector, one of the largest deals in the natural resources sector is China Guandong Nuclear Power Corporation’s (CGNPC) $2.4bn takeover bid for ASX- and TSX-listed uranium developer Extract Resources.

The Chinese state-owned enterprise has made the offer through its Hong Kong-based subsidiary Taurus Minerals for the shares of Extract Resources, the owner of Husab Uranium project in Namibia that contains the third largest uranium deposit in the world. The independent directors of Extract have recently accepted the offer.

This takeover bid came shortly after CGNPC completed its $990m acquisition of Extract’s largest shareholder, London-listed Kalahari Minterals in February 2012 (9 March 2011).

In its latest transaction, CGNPC enlisted Ashurst as its international counsel and Minter Ellison as its Australian counsel. Ashurst Hong Kong partner Robert Ogilvy Watson led the team. Minter Ellison, led by Melbourne-based partner Marcus Best, advised Taurus Mineral on the offer as well as on the $1.2bn financing facility from China Development Bank.

The two teams also advised on CGNPC’s successful bid for Kalahari Minterals.

“The transaction highlights China’s emphasis on diversifying energy resources and its intended very substantial increase in nuclear generating capacity. Taurus Mineral is at the forefront of China’s diversification to provide cleaner and lower carbon power to its growing population,” said Best.

Extract was advised by Clayton Utz, with Perth-based Mark Paganin and Matthew Johnson leading the firm’s team.

In Singapore, GMG Global, a Singapore-listed subsidiary of Chinese state-owned Sinochem International Corporation, has recently acquired a 35 per cent stake in Belgian agro-industrial group Siat SA for €192m.

Singapore firm Rajan & Tann acted as lead counsel for the acquirer with corporate partner Abdul Jabbar Bin Karam Din leading the team.

As Siat has various investments in African countries, such as Ghana, Nigeria, Gabon and Cote d’Ivoire, Rajan & Tann had to work along with a number of other law firms in the transaction, including Belgian firm Loyens & Loeff, Clyde & Co’s Shanghai office, Nigerian firm Aluko & Oyebode and Ghana firm Oxford & Beaumout.

Eubelius, one of Belgium’s largest law firms, acted for the seller and the target company in the transaction. The firm’s lead partners in the transaction are Matthias Wauters and Filip Jenné.

In Hong Kong, China Daye Non-Ferrous Metals Mining has completed a reverse takeover and a new listing application through acquiring a 100 per cent equity interest in Prosper Well Group. China Daye is a Hong Kong-listed company and Prosper Well is its controlling shareholder.

The transaction involved complicated legal and regulatory issues, including a reverse takeover involving a new listing application, a substantial acquisition and connected transaction for China Daye under the Hong Kong Listing Rules, as well as a whitewash waiver application under the Hong Kong Takeovers Code. 

Paul Hastings, led by partner Raymond Li and Catherine Tsang, advised JPMorgan, the sole sponsor and financial advisor of the deal. The firm worked along with PRC counsel Haiwen & Partners.

Norton Rose and Zhong Lun acted for China Daye on Hong Kong law and PRC law respectively. Conyers Dill & Pearman and Legal Consulting law firm advised the company on Bermuda law and Mongolia law respectively.