Telecoms history looks set to repeat itself, with word that a Chinese investor is in talks to buy the office telecoms business of struggling French networking equipment maker Alcatel-Lucent (Paris: ALU). On the one hand, I have to congratulate Alcatel for getting any money at all for the unit, which I suspect is either losing money or perhaps is marginally profitable. On the other hand, I honestly don’t understand why Chinese investment firm Huaxin Post & Telecommunication could possibly want this business, following a disastrous track record for similar European acquisitions by Chinese firms. Read Full Post…
Lenovo shares to come under pressure for next 2 years
Media have been buzzing these last few days about a Hong Kong stock exchange filing revealing that Google (Nasdaq: GOOG) has acquired 6 percent of Chinese PC giant Lenovo (HKEx: 992), implying the deal represents a vote of confidence by the world’s biggest Internet company in the world’s top PC seller. But anyone with any memory will recall that the transaction is just part of Lenovo’s payment for its recent purchase of Google’s Motorola cellphone division. What’s more, Google is almost certain to dump the stock once a lock-up period ends, putting pressure on Lenovo’s stock until that date arrives. Read Full Post…
Things have certainly changed over the last 3 years in Lunar New Year messaging, as reflected by the flood of tech executives using their microblogs to weigh in on Tencent’s (HKEx: 700) launch of a red envelope gift function for its popular WeChat platform over the holiday period. Most of the comments were admiring and even in a slight state of awe at the big success of WeChat’s hongbao product, which lets users send gift money to their friends and relatives over the popular instant messaging platform. But at least one post from Alibaba smelled of sour grapes, and a Sina (Nasdaq: SINA) executive also took a backhanded swipe at the rival to his company’s own Weibo microblogging service. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 8-10. To view a full article or story, click on the link next to the headline.
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Alcatel (Paris: ALUA) In Talks To Sell Phone Unit To Chinese Investment Firm Huaxin (English article)
MIIT Says New VNOs Banned From Building Telecoms Infrastructure (Chinese article)
Two US high-flyers that have relied heavily on the China story to fuel their growth are suddenly going into proactive mode, with KFC’s parent Yum (NYSE: YUM) and personal care products maker Herbalife (NYSE: HLF) both taking new steps to avoid repeats of previous recent disasters. In the former case, Yum has said that so far it sees no signs of declining business at its China KFC stores as we head into the height of the current bird flu season. Meantime, Herbalife is trumpeting its receipt of a quality designation for its products in Taiwan, as it seeks to avoid repeating a disaster at rival Nu Skin (NYSE: NUS) in China last month. Read Full Post…
I previously predicted that e-commerce giant Jingdong would try to make a IPO in the first half of this year, and now we’re hearing that the company has come out galloping in the Year of the Horse by filing a plan for a major New York listing. Word of the plan comes after a year-end boom for Chinese Internet IPOs in New York, most of which have soared since theirdebuts. Jingdong undoubtedly wants to try to seize some of that momentum, but equally important is keen to make its offering before the highly anticipated IPO of its much larger rival Alibaba expected later this year. Alibaba itself was also in the headlines over the Lunar New Year holiday, with the latest financials on the company adding further froth to its soaring valuation. Read Full Post…
The month of February could mark the final sunset for solar panel maker Suntech (OTC: STPFQ), with 2 major events on the calendar that look like the swansong for this former solar energy pioneer. If the ending does indeed come, it would be almost a year after Suntech first was forced into bankruptcy in a Chinese court in its home city of Wuxi, kicking off a contentious process that saw many of its top executives and board members leave and rival Shunfeng Photovoltaic (HKEx: 1165) purchase most of its China-based assets. One of the biggest remaining questions will be how much, if anything, holders of the company’s stock get for their shares. Read Full Post…
Update: Shortly after writing this post, Sony has announced it will sell its Vaio unit to investment firm Japan Industrial Partners (JIP). I still believe that JIP could ultimately bring in Lenovo to help it operate the unit in a new joint venture or other tie-up.
Let’s begin my first post in the Year of the Horse with a look at PC giant Lenovo (HKEx: 992), which has suddenly gone into M&A overdrive with the latest word that it may be in talks to acquire Sony’s (Tokyo: 6753) PC business. I wrote just before the holiday that Lenovo might already be taking on too much with its $2.9 billion purchase of cellphone maker Motorola, which came late last month just a week after its $2.3 billion purchase of IBM’s (NYSE: IBM) low-end server business. (previous post) Individually each of these 3 deals actually look relatively smart, as all complement Lenovo’s existing businesses. But a single major acquisition is always tricky even in the best circumstances, and handling 3 such deals at the same time looks to me like a recipe for trouble. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 2-7. To view a full article or story, click on the link next to the headline.
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We’ll be on vacation on Friday, January 31 and for the first part of next week for the Lunar New Year holiday in China. Some occasional posts may appear in the middle of the week, and the regular schedule will resume next Friday, February 7. Happy Year of the Horse!
The Year of the Snake is ending with a bang for outbound Chinese M&A, with word that leading lender ICBC (HKEx: 1398; Shanghai: 601398) is buying a controlling stake of the European trading unit of South Africa’s Standard Bank for $765 million. This year-end mega-deal comes the same day as another blockbuster deal was announced, which had PC giant Lenovo (HKEx: 992) saying it would buy faded cellphone titan Motorola for $2.9 billion. (previous post) But these 2 deals don’t really share very much besides the fact that both are large outbound purchases by Chinese companies, and I have to say the ICBC deal easily looks like my favorite among the pair. Read Full Post…
