(Yicai) June 6 -- China’s mergers and acquisitions market is heating up, with more than 1,600 deals involving mainland-listed companies announced so far this year and firms listed on the Star Market and ChiNext boards spearheading big reorganizations, the Securities Journal reported.

Eighty-six of the deals unveiled in the year to yesterday were major reorganizations, up from 40 a year earlier, the report said, citing data from Wind Information. Among them, 41 involved businesses traded on China’s tech-heavy boards -- 18 on Shanghai’s Star Market and 23 on Shenzhen’s ChiNext -- compared with 10 a year ago.

Large reorganizations are M&As that involve the sale of more than half of a company’s audited consolidated assets, revenue, or net assets from the previous fiscal year, with the total value exceeding CNY50 million (USD6.9 million).

The deals so far show that listed companies in industries such as biomedicine, semiconductors, and next-generation information technology are acquiring tech-intensive businesses to transform and upgrade.

For example, Empyrean Technology, which develops electronic design automation software, said in March that it planned to buy peer Xpeedic. The same month, optical components firm Optowide Technologies announced its intention to acquire optical interconnect products maker Sont Technologies. Fuel cell systems provider Beijing SinoHytech said in February that it planned to buy Dingzhou Risun Hydrogen Energy.

Some companies are also using M&As to extend and strengthen their supply chains. Beijing Sun-Novo Pharmaceutical Research, for instance, announced last month that it intended to acquire Jiangsu Langyan Life Technology Holdings, a producer of active pharmaceutical ingredients and formulations.

The active participation of Star Market and ChiNext companies in deals cannot be separated from policy‐driven support, according to analysts. Last September, the China Securities Regulatory Commission said it would support firms listed on those boards in acquiring upstream and downstream assets, guiding more resources toward new quality productive forces. In May, the CSRC issued other documents clarifying the related support measures.

These firms are also eager to pursue deals because they need them to fuel their growth. Sci-tech firms typically focus on specialized niches and know exactly which acquisitions will rapidly bolster their tech capabilities and expand their industrial chains. As a result, they are especially eager to act when support policies emerge, a Star Market executive told China Securities Journal.

Editor: Futura Costaglione