Bottom line: Groupon’s new tie-up with Comcast shows it’s more interested in working with a well-known US-based company than the unfamiliar Alibaba, which could force Alibaba to quietly dump its Groupon stake by the end of this year.
Comcast buys into Groupon
It seems e-commerce giant Alibaba (NYSE: BABA) isn’t the only company interested in money-losing group buying site Groupon (Nasdaq: GRPN). Less than 2 months after Alibaba disclosed it had purchased 5 percent of Groupon shares, apparently in the open market, a firm backed by US cable giant Comcast (Nasdaq: CMCSA) has just announced plans for its own strategic tie-up with the faded group buying site.
This new move certainly seems to throw some doubt on my previous prediction that Alibaba’s purchase could presage a boosting of its stake in Groupon, or perhaps even an outright buyout bid. While such a move is still possible, Groupon does seem to be signaling that it intends to remain independent. It also seems to be indicating it prefers this more direct approach to forming new partnerships, rather than Alibaba’s approach that looks a bit stealthier since it appeared to buy its Groupon shares without the company’s consent. Read Full Post…
Bottom line: A high-profile China visit by Google CEO Sundar Pichai reflects warming ties between the company and Beijing, and presages a probable launch of the Google Play app store and Nexus phones in China by the end of this year.
Google’s Pichai in high-stakes game with Beijing
In a move that looks like something from a high-stakes chess game, Google’s (Nasdaq: GOOG) CEO is taking advantage of the huge publicity surrounding a recent triumph of his company’s artificial intelligence (AI) to make a high-profile visit to China. Google is hardly a welcome name in the country, following its high-profile spat in 2010 over Beijing’s strict self-censorship policies that prompted it to shutter its China-based search service.
Since that blow-up, however, Google has more recently been gingerly tip-toeing back to China. Reports through much of last year indicated the company was making necessary preparations to launch a Chinese version of its Google Play app store, possibly in hopes of selling its Nexus brand of smartphones in the world’s largest mobile market. Read Full Post…
Bottom line: A veto threat by China’s insurance regulator ultimately killed Anbang’s bid for Starwood, but the Chinese insurer is likely to pursue more mega-purchases in the more traditional overseas real estate sector this year.
Starwood abandoned at altar by Anbang
In a sudden and unexpected turn in the bidding war for hotelier Starwood (NYSE: HOT), Chinese suitor Anbang has suddenly bowed out of the contest without explanation, paving the way for a merger with US suitor Marriott (NYSE: MAR). Many are marveling at this sudden turn of events, since Anbang earlier this week had submitted an all-cash bid that was 6 percent higher than Marriott’s latest offer for Starwood, operator of the Sheraton and Westin hotel brands.
But anyone in China might say they saw this coming, based on a couple of local media reports from sources at Anbang and China’s insurance regulator. The first of those reports came last week, and saw one of China’s top financial media report that the Chinese insurance regulator was likely to veto a deal over concerns about the size of the investment. That was followed by another report based on comments from an Anbang insider this week, saying the regulator would have no grounds to veto such a deal. Read Full Post…
In a move that is likely to alleviate its strained relationship with Beijing and give new impetus to big data in one of China’s poorer regions, Qualcomm (Nasdaq: QCOM) has signed a strategic cooperation agreement with the provincial government of Guizhou.
Signed on January 17, the agreement will see Qualcomm establishing a Guizhou-based investment corporation to look for more business opportunities in China’s integrated circuit market, and promote the development of the country’s related industries.
The deal, which also creates a joint venture named Guizhou Huaxintong SemiconductorTechnology, is a major step in Guizhou’s effort to position itself as a leader in the big data field in China. The province has been designated by the central government as a pilot zone for the development of big data, and has a sound regulatory framework and a sophisticated infrastructure that is of growing interest to foreign tech firms. Read Full Post…
Bottom line: Disney will face huge challenges in running a smooth opening for its new Shanghai park in June, as it faces potential negative publicity from aggressive ticket scalpers and other glitches associated with such a big event.
Tickets sell out for Shanghai Disney opening day
The official countdown has begun to the June opening of Shanghai Disneyland, in a story that contains both scripted and unscripted moments reflecting what a commotion this event is likely to become. In the scripted category, luminaries including basketball legend Yao Ming and piano superstar Lang Lang attended an event this week kicking off the 80 day countdown to the big opening. In the unscripted column, opening day tickets to the park sold out quickly after going on sale, and were showing up later in the day from scalpers who were asking for twice the price or more.
I was living in Hong Kong just before Disney opened its last theme park there back in 2005. I don’t recall nearly this level of hype before that opening, and certainly not the big issue with scalpers that are an endemic part of the Chinese landscape. But I do recall the numerous glitches that occurred in the months after the Hong Kong park opened, and how media feasted on the negative developments that are almost inevitable when launching a project of such magnitude. Read Full Post…
Bottom line: Marriott stands a 60-40 chance of having its bid for Starwood approved at an April 8 shareholder vote, since a competing Anbang proposal could face the strong possibility of rejection by China’s insurance regulator.
Anbang confident of Beijing will approve Starwood bid
A series of new reports and data on Chinese insurer Anbang are showing why the company is confident it can get regulatory approval from Beijing in its heated bidding war for Starwood (NYSE: HOT), operator of the Sheraton and Westin hotel brands. I also expect that the US regulator would have little or no reason to veto such a deal on national security grounds, since Starwood really doesn’t handle any sensitive information as hotel operator.
Thus from a regulatory perspective, if the latest Chinese reports are correct, it does look like Anbang would be able to get the necessary regulatory approval from both Washington and Beijing to buy Starwood for $14 billion in its ongoing bidding war with Marriott (NYSE: MAR). But the reports coming from China are quite contradictory, reflecting a potential looming clash between Anbang and China’s conservative insurance regulator. Read Full Post…
Bottom line: Starwood’s board is likely to reject a new raised offer for the company from Anbang and keep its recommendation to accept a lower bid from Marriott, which offers more certainty of closing a deal and also better long-term prospects.
Anbang ups the ante in Starwood bidding war
The latest development in the bidding war for US hotelier Starwood (NYSE: HOT) looks both expected and unexpected, with word that Chinese suitor Anbang has upped its offer to top the most recent bid from rival Marriott (NYSE: MAR). I say the move looks expected based on my previous assessment that Anbang looked determined to buy Starwood at any price. But the new bid is also a bit unexpected because Chinese media reported last week that the nation’s insurance regulator was likely to veto such a deal, which seemed to show Anbang might drop its pursuit of the purchase that is now valued at $14 billion.
The latest developments also include a response from Marriott, which seems to be saying “enough already”. That would indicate Marriott doesn’t plan to raise its latest bid, which is about 6 percent lower than the new one from Anbang, and instead let Starwood’s board decide which offer to recommend. Read Full Post…
Bottom line: Microsoft’s development of a special Windows 10 China government edition reflects efforts western tech firms are making to comply with Beijing’s year-old national security law.
Microsoft makes special Windows 10 edition for Beijing
US software giant Microsoft (Nasdaq: MSFT) is sending the latest sign that foreign tech firms are bending to Beijing’s national security concerns, with word that it has created a special version of Windows 10 just for the Chinese government. This kind of a move looks relatively bold, and sharply contrasts with Apple’s (Nasdaq: AAPL) recent refusal to assist the US government in its drive to unlock a terrorist’s iPhone.
But Microsoft’s move isn’t completely unprecedented either, since the software giant also made a similar move more than a decade ago when it released the source code for Windows to Beijing. Since then, Microsoft has continued to share its Windows source code with Beijing for newer versions of the operating system, reflecting the importance the company places on the huge China market. Read Full Post…
Bottom line: Anbang is likely to drop its pursuit of Starwood due to objections by Beijing, leaving Marriott as the winner in their brief but frenzied bidding war.
Anbang forced to choose between Starwood and Strategic Hotels
Just a day after I predicted that aggressive Chinese insurer Anbang would make a counter-offer in its bidding war with Marriott (NYSE: MAR) for US hotel giant Starwood (NYSE: HOT), a new report is saying such a bid would almost certainly get vetoed by Beijing regulators. That’s an important new element in this story, since Beijing must approve all global acquisitions of this size by Chinese companies.
This particular move is a bit unexpected, since Anbang almost certainly would have gotten Beijing’s permission before launching its surprise bid earlier this month for Starwood, operator of the Westin and Sheraton brands, which had agreed last year to be bought by Marriott. But in an important twist to the story, Anbang also recently opened talks to pay $6.5 billion for a portfolio of US luxury hotels owned by Strategic Hotels & Resorts. (previous post) Read Full Post…
Bottom line: Midea could buy another global brand following its purchase of Toshiba’s home appliance business, while hometown rival Gree will also feel pressure to make a small to mid-sized overseas acquisition in the next 1-2 years.
Midea in MOU for Toshiba’s appliance unit
Following several days of rumors, struggling Japanese tech giant Toshiba (Tokyo: 6502) has confirmed it will sell a controlling stake in its home appliance business to Midea (Shenzhen: 000333), extending a fledgling movement by Chinese buyers abroad. The move could pressure other Chinese rivals, most notably Gree (Shenzhen: 000651), to follow in the footsteps of Midea and Haier (HKEx: 1169), which is also in the process of buying General Electric’s (NYSE: GE) appliance business.
From a bigger perspective, this particular trend looks a bit like what happened several decades ago in the older industry for TV sets. That trend saw Asian buyers purchase big western brands in the fading TV industry, with storied names like Zenith and RCA ultimately get gobbled up. Fast forward to the present, when most of those older brands no longer exist or are insignificant, which could hint at what may lie ahead for these new purchases by the Chinese companies. Read Full Post…
Bidding wars follow certain principles, but the recent battle for US hotel operator Starwood (NYSE: HOT) between local rival Marriott (NYSE: MAR) and Chinese insurer Anbang is quickly diverging from one of the most central rules. In a move that surprised many, including myself, Anbang has suddenly upped its bid for Starwood, increasing its original offer that was already 12 percent higher than Marriott’s original and only bid dating back to last year.
In all my years of covering M&A and bidding wars, this is the first time I can recall of a company increasing its own bid that wasn’t in response to a rival counter bid. The strange move probably reflects Anbang’s worries that its original offer might get rejected by Starwood, which I previously predicted would choose Marriott as a more dependable partner despite its lower offer. Now we’ll have to wait to see if Marriott responds by raising its original offer, which is now about 15 percent lower than Anbang’s latest bid. Read Full Post…
