HSBC Sees Australia Opportunities as China M&A Focus Shifts

  • Bank hired ex-UBS banker Couzner in July to head Australia M&A
  • China's focus turning from resources to real estate, health

HSBC Holdings Plc, which has boosted its Australian capital financing team more than eightfold since 2008, says there are opportunities in the nation as China shifts its investment focus from resources.

“The focus has moved to infrastructure, real estate, agriculture, health and food security,” James Dynon, who heads the unit, said in an interview in Sydney. Many Chinese firms are looking overseas to “continue their growth story, and Australia is a big part of that.”

HSBC has hired bankers in project finance and debt capital markets, Dynon said. The expansion included the appointment of former UBS Group AG banker Scott Couzner in July to the new position of head of Australian M&A.

Purchases of Australian assets involving Chinese companies almost doubled to a record A$8 billion ($6.1 billion) in 2015 from a year earlier, according to data compiled by Bloomberg. The transactions included Biostime International Holdings Ltd.’s A$1.3 billion purchase of supplements company Swisse Wellness Group Pty and Luye Group Ltd.’s $688 million acquisition of private hospital operator Healthe Care Australia Pty.

Cattle Station

Two Chinese firms are battling to buy family-owned cattle company S. Kidman & Co., the largest private land holding in the country which runs about 185,000 cattle at ranches spanning 101,000 square kilometers (39,000 square miles).

Chinese companies have announced $103.8 billion of offshore acquisitions this year, compared with $124 billion in all of 2015, according to Bloomberg-compiled data. HSBC was lead adviser to China National Chemical Corp. on its $43 billion acquisition of Swiss pesticide and seeds maker Syngenta AG.

Dynon said the bank is well placed to capitalize on growing Chinese investment in Australia.

“There has been a huge amount of M&A in recent years in Australia and a lot of that was investment into Australia from places like China,” Dynon said. “So there is a big opportunity there and HSBC has strong relationships in China and Hong Kong.”

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