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and THE MERRILL CORP. LOGO SHOULD GO HERE welcome you to our webcast: Riding the Chinese M&A wave in the U.S. Introduction Moderator: Mary Kathleen Flynn Senior Editor/Video Producer The Deal LLC REMINDER: Listeners will be in listen-only mode. We encourage you to e-mail questions via the Q&A panel box to the right of your screen. Select questions will be answered during the last 10 minutes of the program. We will be providing several poll questions throughout the discussion. These questions will also appear in a panel box on the right of your screen. If you are having technical difficulties, please call customer support at 866-229-3239. EXPERT PANEL Monish Bahl Senior Vice President, Business Development and M&A CDC Corp. Gene Ramirez Managing Director Morgan Joseph TriArtisan Inc. Lance Gilliland Managing Director Tudor, Pickering, Holt, & Co. EXPERT PANEL Charles Comey Partner Morrison & Foerster LLP Todson Page Transaction Services Partner PricewaterhouseCoopers • China’s annual real GDP growth has averaged 9.9% from 1980 t0 2010, triple the worldwide rate of 3.3% • The Chinese government has supported outbound M&A. The China Development Bank, for example, has loaned $30 billion to state-owned China National Petroleum Corp. for more overseas M&A in energy resources Source: Robert W. Baird Co. What conditions are currently encouraging Chinesebased companies to pursue U.S. assets? Values are stabilizing, with technology and energy sectors leading the way VValue trends CChina into U.S. - $ in millions Healthcare 6% $10,390 Materials 17% $4,411 $4,402 $2,804 $1,609 2006 $1,189 2007 Financials 11% 2008 Consumer Products 6% 2010 High Technology 33% Industrials 6% 2009 2010 Q1 11 VVolume trends CChina into U.S. - No. of deals 19 Energy and Power 22% 18 Fin an cials 12% 12 11 11 8 2006 2007 2008 2009 2010 Q1 11 En erg y and Po wer 38% Q1 ‘11 Hig h Tech nology 37% Co n sumer Pro d ucts 6% SSource: Thomson Reuters 4/15/2011 The coveted targeted sectors: Energy and tech • Computers and electronics has been the leading outbound target sector over the past 10 years. Lenovo acquired IBM’s personalcomputer business for $1.75 billion in ’04. • U.S. companies have become the most frequent targets by Chinese firms. Firms headquartered in the U.S. have accounted for 18% of outbound targets since 2001. Source: Robert W. Baird Co. AUDIENCE SURVEY QUESTION: What do you believe is the biggest factor driving increased Chinese M&A activity in the U.S.? A. Strength of the Chinese yuan vs. U.S. dollar B. Strengthening of global economy C. Increased demand in China for U.S. products and services D. Political and financial instability in other global economies E. Other SELECT RECENT CHINESE ACQUISITIONS IN THE U.S. Buyer Target Date Amount AVIC Automobile Industry Holding Co. Ltd. China-based auto manufacturer 51% of Nexteer Automotive April 9, 2011 $229.5 million Aviation Industry Corp. Cirrus Industries U.S. aircraft maker Feb. 28, 2011 $210 million Tencent Holdings Ltd. Riot Game Inc. Los Angeles-based online game developer Feb. 4, 2011 $350 million Cnooc International Ltd. 33.3% stake of DenverJulesburg and Powder River Basins project Jan. 30, 2011 $570 million U.S.- based automobile manufacturer Source: Morgan Joseph TriArtisan LLC SELECT RECENT CHINESE ACQUISITIONS IN THE U.S. Buyer Target Date Amount Industrial and Commercial Bank of China Ltd. 80% stake in Bank of East Asia National Association Jan. 23, 2011 $140 million LDK Solar Co. Ltd. 71.83% stake in Solar Power Inc. Jan. 6, 2010 $35 million Nov. 28, 2010 $1.23 billion California-based solar company China Huaneng Group InterGen NV U.S.- based provider of power generation and fuel management services Source: Morgan Joseph TriArtisan LLC Challenges for China-based acquirers in the U.S. Deal structure trends of Chinese acquirers: Minority stakes and joint ventures AUDIENCE SURVEY QUESTION: What effect do you believe increased Chinese M&A activity will have on the pricing of U.S. acquisition targets? A. Greatly increased prices B. Somewhat increased prices C. None D. Somewhat decreased prices E. Greatly decreased prices Attributes Chinese-based acquirers bring to table besides capital The effects of turmoil in the Middle East and nuclear crisis in Japan on Chinese acquirers in the U.S. Closing remarks: Outlook for Chinese acquirers in the U.S. THE DEAL WEBCAST SERIES Upcoming Events Brought to you by The Deal LLC and Bank of America Corp., this complimentary event on April 28 showcases the best ways to navigate new rules and trends in deal financing in the middle market and beyond. Reserve your seat: https://thedeal.webex.com/thedeal/onstage/g.php?t =a&d=666331375 and THE MERRILL CORP. LOGO SHOULD GO HERE thank you for joining our webcast •