Sixty-five deals were completed in the Chinese mergers and acquisitions market in April, with investment of USD2.5 billion, down 50.8% year-on-year, according to a Zero2IPO Group report. Fewer overseas M&A deals were made in April compared with the same period last year. The property sector continued to be popular in April for M&A deals, with nine completed. In the first quarter, 25 deals were made in this sector, making it the most active.

Chinese regulators have given a qualified green light to Japanese trading house Marubeni Corp’s USD5.6 billion purchase of U.S. grain merchant Gavilon, imposing stiff conditions that underscore Beijing’s anxiety over food security. The deal was announced almost a year ago but has been held up for months by Beijing’s close scrutiny of the combined group, which would have a leading role in supplying soybeans and other grains to China. U.S. and European antitrust authorities had already cleared the transaction. The Anti-Monopoly Bureau within the Ministry of Commerce (MOFCOM) said that the merger may “eliminate or limit competition in China’s soybean importing market.” Gavilon and Marubeni would be required to maintain separate, independent trading units when selling soybeans to China, with strict firewalls to prevent any exchange of market information. China, the world’s top soy importer, wants competition for soybean sales to ensure it is able to secure all the oilseeds it needs. The conditions imposed by China were surprising because it is unlikely that Marubeni and Gavilon would be able to control supplies or fix prices in such a large market, said Danny Murphy, President of the American Soybean Association. Marubeni’s USD5.6 billion acquisition of Gavilon, an amount that includes the assumption of around USD2 billion of debt, propels Japan’s fifth-largest trading house into the top ranks of global merchants. Marubeni gains access to Gavilon’s vast grain storage network as well as a significant domestic fertilizer and oil trading operation. Marubeni is already the second-largest exporter of U.S. grain to China, handling about a fifth of such exports in 2010. China’s soybean imports could approach 80 million tons within the next five to seven years, up from the record 61 million tons expected for the crop year that ends on August 31, Murphy said. China’s expected imports this year represent nearly a quarter of global soybean production. Marubeni last year was the largest soya supplier to China, exporting 10.5 million tons of the 58.4 million tons the country bought overseas, ahead of rivals Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus Commodities.

Overseas merger and acquisition plans by Chinese businesses have reached a record high, according to a survey from international accounting firm Grant Thornton. Nearly half of Chinese businesses polled (47%) for the Grant Thornton International Business Report 2013 said they were planning international moves, the highest level since the company first asked the question in 2008. “China businesses are now better prepared for cross-border M&As after years of high growth, and more said they will seek growth from these kinds of transactions when the time is right,” said Xu Hua, CEO of Grant Thornton. According to the survey, 61% of businesses said establishing a presence in new geographical markets was the primary motivation to participate in M&As. Businesses also put emphasis on using M&As to acquire new technology or establish brands (58%) and build scale (54%). Some 40% said possible M&As could lower their operational costs. Retained earnings (36%) and bank finance (28%) are still the two most common financial channels for China businesses, the report showed. Despite the gloomy IPO market, willingness to launch IPOs (22%) was higher than last year (18%). On the other hand, businesses willing to raise money from private equity dropped from last year’s 17% to 13% this year. The report warned that businesses should rely on advice from investment banks, accounting firms, and law firms to conduct due diligence to avoid risks. The Grant Thornton study comes soon after one from rival KPMG which said the United States could be the most attractive destination for Chinese companies seeking M&As. In 2012, there were 40 M&A deals valued at USD11.1 billion involving Chinese companies in the U.S., the second-largest destination for China’s M&A capital after Canada, according to KPMG.

The appetite for acquisitions among Hong Kong businesspeople has dropped to the lowest level in six years, battered by renewed worries about the euro-zone’s debt problems, accounting firm Grant Thornton said. The firm expects overall sentiment to gradually recover in the third quarter after policymakers in Beijing unveil their implementation program for the 12th Five Year Plan. The share of local firms planning to pursue acquisitions fell to 18% this year, the lowest level since 2008, while the proportion of mainland executives looking to buy assets slipped to 28%, a three-year low, according to the Grant Thornton report, based on a survey of 200 Hong Kong and 400 mainland executives.

China Foods will buy two or three wineries in Australia and the United States, worth at least USD20 million, in a bid to expand its wine sales while fending off competition from surging wine imports. China Foods’ Managing Director Luan Xiuju also said the company is in talks with two global leading wine dealers to become their exclusive brand representative and distributor in China. The company owns two overseas wineries: Chateau Viaud in Bordeaux, France, and the Bisquert winery in Chile. Sales from its wine import business were less than USD15 million last year. China’s wine imports have seen a significant increase over the last seven years. The amount surged from fewer than 400 million liters in 2004 to 1,400 million liters in 2011, according to a report by Rabobank, making the country an attractive market for wine dealers across the world. Among foreign suppliers, France continued to dominate China’s wine market in 2012. From June 2011 to July 2012, China’s imports of Bordeaux wine reached 63 million liters. Sales of domestic producers have been declining. Yantai Changyu Pioneer Wine Co saw a dramatic decline in its sales of premium wines and reported an 11.1% fall in net profit to CNY1.7 billion for 2012. China Foods’ net profit slumped 41%  from HKD646 million Hong Kong to HKD382 million. Apart from further overseas expansion, China Foods said it also plans to boost sales by launching new entry-level products priced between CNY50 and CNY100, the China Daily reports.