Bottom line: CIC’s withdrawal from the bidding for a stake in Yum’s China unit represents a minor setback, but Yum’s long history in the market makes finding major local investor less important.
CIC ends bid for Yum China stake
KFC parent Yum Brands (NYSE: YUM) has lost a major potential ally as it prepares to spin off its China business, with word that China’s sovereign wealth fund has dropped out of the bidding for 20 percent of the unit. Reuters is reporting that China Investment Corp (CIC) abandoned its bid for a number of reasons, including Yum’s refusal to sell a controlling stake to the new investor group. Yum has previously said it wants to sell just 20 percent of the China unit, which includes 7,200 stores. It also plans to sell more of the unit’s shares through an IPO later this year in Hong Kong or New York. Read Full Post…
The following press releases and news reports about China companies were carried on May 21-23. To view a full article or story, click on the link next to the headline.
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CIC Ends Talks With Yum Brands (NYSE: YUM) Over China Business – Sources (English article)
Mystery Canadian Hotel Buyer Said Potentially Tied to Anbang (English article)
Samsung (Seoul: 005930) Integrates Alipay Mobile Pay Function Into Smartphones (Chinese article)
Chinese Buyers Circle Soccer “Super” Agent Stellar Group (English article)
TCL (HKEx: 1070) Sets Up TV Joint Venture Factory in Egypt (Chinese article)
The following press releases and news reports about China companies were carried on May 20. To view a full article or story, click on the link next to the headline.
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Temasek, CIC-KKR Advance to 2nd Round of Yum (NYSE: YUM) China Stake Sale (English article)
BT (London: BT) Applies for Telecoms Value Added Service License In Shanghai FTZ (Chinese aticle)
Bottom line: A strong field of cornerstone investors indicates BOC Aviation’s IPO could post moderate gains in its trading debut, while Didi’s IPO plan shows that New York remains an attractive option for Chinese firms that are leaders in their sectors.
Fosun, Boeing buy into BOC Aviation
A couple of major IPOs are in the headlines today, led by some encouraging signs for an upcoming listing from BOC Aviation, the aircraft leasing arm of Bank of China (HKEx: 3988; Shanghai: 601398) that’s in the process of making a $1.1 billion offering in Hong Kong. Meantime, we’re getting some of the first concrete signals of the IPO plans for Didi Chuxing, the homegrown Chinese equivalent of Uber, which is reportedly eyeing a US listing in 2018.
Let’s jump right in with BOC Aviation, which looks like an attractive IPO to me since it should benefit from China’s booming demand for air travel. Yet despite that potential, the offer has stumbled somewhat since Bank of China first announced its plans to make a separate listing for the unit back in March. BOC Aviation was initially hoping to raise up to $1.5 billion, but pared the amount back to the current $1.1 billion after meeting with lukewarm demand due to recent market volatility. Read Full Post…
Bottom line: Alibaba’s new cloud tie-up shows that Korea is a primary market for its global expansion, while the new $4.5 billion funding for its Ant Financial affiliate could be followed by an IPO within the next 12 months.
Alibaba in Korea cloud initiative
E-commerce giant Alibaba (NYSE: BABA) is in a couple of major headlines today, led by word that its Ant Financial affiliate has just raised a whopping $4.5 billion in only its second-ever funding round. That particular story has been rippling through the headlines for a few weeks now, and is most notable because the deal is finally done and is triple the company’s original fund-raising target.
The other headline has Alibaba itself in a new deal to launch cloud computing services in South Korea, working in a partnership with a unit of local telecoms giant SK Telecom (Seoul: 017670). This particular deal is interesting because it represents Alibaba’s recent search for global growth stories, in a bid to satisfy investors worried about a slowdown in its home China market. Read Full Post…
Bottom line: Yum may sell control of its China unit to Chinese partners in a bid to become more local, while ZTE’s plans for a Nubia IPO reflect a growing emphasis on its younger, trendier smartphone brand.
China set to take control of local KFC?
A couple of big IPO stories are rippling through the headlines, led by word that an investor group headed by China’s sovereign wealth fund could buy control of the China unit of Yum Brands (NYSE: YUM), owner of the KFC fast-food chain, as it gets set for a spin-off and separate listing. This particular news marks a shift from previous reports that implied Yum would retain control of its China unit, even as it sold a major stake to big institutional investors.
While the Yum listing is likely to come later this year, another smaller but interesting deal has telecoms giant ZTE (HKEx: 763; Shenzhen: 00063) saying it plans to spin off and separately list its smartphone division that manufactures under the Nubia brand in the next 3 years. That hints that ZTE may be re-thinking its smartphone business, and perhaps preparing to slowly de-emphasize its older ZTE-branded phones in favor of its younger, higher-end Nubia line. Read Full Post…
The following press releases and news reports about China companies were carried on April 20. To view a full article or story, click on the link next to the headline.
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Ant Financial Completes Funding Round at $60 Bln Valuation (Chinese article)
China Sovereign Fund to Seek Control of $8 Bln Yum (NYSE: YUM) China Unit (English article)
Asos Closes China Business Under Weight of Alibaba (NYSE: BABA) Competition (English article)
ZTE’s (HKEx: 763) Nubia Smartphone Brand Says to IPO Within 3 Years (Chinese article)
New Oriental Announces Fiscal Q3 Results (PRNewswire)
Bottom line: Starwood will ultimately reject a rival bid for itself by Chinese insurer Anbang, though earlier suitor Marriott may have to raise its original offer in order to close a deal.
Anbang makes counter bid for Starwood
China is shaping up as spoiler in the biggest US hotel merger of all time, with word that Chinese insurance company Anbang has made a surprise counter bid for Starwood (NYSE: HOT), operator of the Sheraton and Westin brands. The bid comes as the struggling Starwood was preparing to sell itself to larger and better-run US rival Marriott (NYSE: MAR), whose original offer is about 5 percent lower than Anbang’s. The latest twist also comes just a day after media reported that Anbang was in talks for another blockbuster deal to buy Strategic Hotels & Resorts, owner of a portfolio of US luxury hotels, in a deal valued at $6.5 billion.
I previously said that Anbang appears to be a company with too much cash, and would add that it doesn’t seem to have a very strong understanding of the hotel business. Put simply, Anbang seems to be suddenly smitten with any asset containing the word “hotel”, since Strategic and Starwood are very different types of companies. Whereas Strategic is largely a property owner, Starwood earns most of its money from managing hotels under its brands in buildings owned by other companies. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 31. To view a full article or story, click on the link next to the headline.
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China to Increase Wind, Solar Power Capacity by 21 Pct in 2016
McDonald’s (NYSE: MCD) Supplier OSI China Trial Concludes in Shanghai (English article)
China Investment Corp (CIC) Sells Down SMIC (HKEx: 981) Stake (HKEx announcement)
Hareonsolar De-listing Risk Up After United PV (HKEx: 686) Acquisition Hits Obstacle (Chinese article)
China Telecom (HKEx: 728) Announces Resigation of Chang Xiaobing as Chmn, CEO (HKEx announcement)
The following press releases and media reports about Chinese companies were carried on October 24-26. To view a full article or story, click on the link next to the headline.
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Tesla (Nasdaq: TSLA) CEO Says Negotiating with China on Local Production (English article)
A Chinese group has failed in its bid to buy a top global aircraft leasing firm for the second time in 2 years, with word of the collapse of talks by domestic aviation giant AVIC and Chinese sovereign wealth fund CIC to purchase Europe’s Avolon. This second case follows another failed bid by a lesser-known group to buy US giant ILFC last year, and shows that Chinese firms still have a bit to learn when doing this kind of M&A. Some politics may also have been at play in this latest case, since AVIC is also designing a new large commercial aircraft that it hopes will someday compete in a lucrative market now dominated by Boeing (NYSE: BA) and Airbus (Paris: AIR). Read Full Post…
