Bottom line: The purchase of Micron by Tsinghua Unigroup offers a good chance for Sino-US confidence building if Washington signals it will fairly consider such a deal and Unigroup demonstrates its actions are commercially driven.
Micron sale offers chance to boost Sino-US trust
A potential mega-deal that would see China’s Tsinghua Unigroup buy leading US memory chip maker Micron Technology (Nasdaq: MU) could become a major trust-building exercise between China and Washington if handled properly, but could also quickly end in an angry war of words if the opposite occurs. Both sides need to take important steps to ensure fair trade in the case, which is sensitive because it involves the acquisition of a US high-tech leader by a company with close ties to China’s top science university.
For its part, Unigroup could take steps to show its independence from Tsinghua University, and more broadly to show that it is a commercially-focused business that doesn’t make decisions based on government orders or support. For its part, Washington could signal it is willing to consider a deal that appears to pose no threat to national security, even though it would see a major technology company taken over by a Chinese peer. Read Full Post…
A summer full of negative news for Sino-foreign trade relations got a rare piece of positive news over the weekend, with word that the US has approved the sale of IBM’s (NYSE: IBM) low-end server business to Chinese PC giant Lenovo (HKEx: 992). The case looks a bit like another deal between the pair of tech giants nearly a decade ago, when IBM agreed to sell its high-profile PC business to Lenovo, only to see the deal run into political headwinds before finally getting approved by Washington. But this latest approval is slightly different, as it comes against a backdrop of heightened trade and other national security tensions between China and the west, especially from the US. Read Full Post…
Private equity investor Fosun International (HKEx: 656) is closing in on a landmark but controversial deal to buy US publishing giant Forbes Media, which would become the first purchase of a major western media firm by a Chinese company. The deal is almost certain to draw attention in the US where Forbes is based, with some calling for the government to stop the sale over concerns that Fosun could interfere with Forbes’ editorial independence and block publication of sensitive content. Read Full Post…
After logging another strong year in 2013, outbound acquisitions by Chinese firms are getting off to another strong start in the New Year with 3 major new deals in the headlines last week. These latest deals reflect a broad range of targets, both in terms of industries and company health, in a welcome relief from an old pattern that saw Chinese companies often chase sickly, troubled western firms. Read Full Post…
An interesting new trend has major Chinese firms financing their global expansions with mega bond offerings, with leading brokerage Citic Securities (HKEx: 6030; Shanghai: 600030) and oil exploration giant CNOOC (HKEx: 883; NYSE: CEO) becoming the latest to tap international debt markets. This kind of overseas mega bond issue isn’t really new for Chinese firms, as many in sectors ranging from telecoms to real estate have issued similar corporate debt in the past. But what’s new now is that these latest offers are coming from companies that have made major acquisitions over the last year, and now they’re testing the markets to see if bond buyers will help to pay for those assets. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 26. To view a full article or story, click on the link next to the headline. ══════════════════════════════════════════════════════
ZTE (HKEx: 763) To Increase Smartphone Revenues By 30 Pct In 2013 (Businesswire)
Tencent (HKex: 700) Establishes US Office for WeChat (English article)
CNOOC (HKEx: 883) Says Completed Nexen Acquisition On Feb 25 (HKEx announcement)
Qihoo (NYSE: QIHU) To Provide Internet Security Products to Commerce Ministry (PRNewswire)
Yum (NYSE: YUM) Cutting Some Supplier Ties After China Food Scare (English article)
In a big victory for free trade, the US has approved the sale of Canadian oil exploration giant Nexen (Toronto: NXY) to China’s CNOOC (HKEx: 883; NYSE: CEO), removing the last major obstacle that could have stopped the landmark deal. The US approval was decidedly low-key, with Nexen formally announcing it had received the final major green light it needed to close the sale. (English article) The development marks the second major approval of a potentially sensitive deal by the US in the last month, and is the latest indicator that such deals that pose no real risk to national security and are likely to move forward for now without political resistance.
In a big victory for free trade, the US has approved the sale of Canadian oil exploration giant Nexen (Toronto: NXY) to China’s CNOOC (HKEx: 883; NYSE: CEO), removing the last major obstacle that could have stopped the landmark deal. The US approval was decidedly low-key, with Nexen formally announcing it had received the final major green light it needed to close the sale. (English article) The development marks the second major approval of a potentially sensitive deal by the US in the last month, and is the latest indicator that such deals that pose no real risk to national security and are likely to move forward for now without political resistance.
China’s oil and resource companies have been on a buying binge over the last year, snapping up global assets at what look like relative bargains from cash-strapped global companies under pressure to raise money. Beijing has been paying the bills for most of the purchases so far, but the latest announcement from oil refining giant Sinopec (HKEx: 386; Shanghai: 600028; NYSE: SNP) indicates that China may be testing the waters to see if investors are willing to help pay some of the bill in this global buying binge. If that’s the case, Beijing may soon face some major resistance from its major resource companies’ shareholders, who are likely to question whether Sinopec and other Chinese resource firms are getting good value for their money.
After a stormy 2012 that saw growing trade friction between China and the US, I’m happy to see that 2013 is getting off to a better start with Washington’s approval of a potentially sensitive sale of a bankruptcy US technology firm to a Chinese buyer. Many readers will know that I’m talking about the case of A123 Systems, a former high-flying US battery maker that fell on hard times as new energy industries worldwide experienced a broader downturn in demand for their products.
Just a week after Canada approved the $15 billion purchase of oil exploration firm Nexen (Toronto: NXY) to Chinese rival CNOOC (HKEx: 883; NYSE: CEO), we’re seeing a couple of interesting new M&A deals in the energy sector, one involving policy lender China Development Bank and the other from Hong Kong-listed China Gas (HKEx: 384). The common theme is that many Chinese energy investors are relatively flush with cash right now, and are looking for bargains in a global sector where asset prices have become depressed due to lingering effects of the global downturn. But that said, these 2 deals are both quite different, with the first most likely being driven at least partly by Beijing while the latter looks like a more traditional private sector deal.
In a big victory for free trade, the US has approved the sale of Canadian oil exploration giant Nexen (Toronto: NXY) to China’s CNOOC (HKEx: 883; NYSE: CEO), removing the last major obstacle that could have stopped the landmark deal. The US approval was decidedly low-key, with Nexen formally announcing it had received the final major green light it needed to close the sale. (
China’s oil and resource companies have been on a buying binge over the last year, snapping up global assets at what look like relative bargains from cash-strapped global companies under pressure to raise money. Beijing has been paying the bills for most of the purchases so far, but the latest announcement from oil refining giant Sinopec (HKEx: 386; Shanghai: 600028; NYSE: SNP) indicates that China may be testing the waters to see if investors are willing to help pay some of the bill in this global buying binge. If that’s the case, Beijing may soon face some major resistance from its major resource companies’ shareholders, who are likely to question whether Sinopec and other Chinese resource firms are getting good value for their money.
After a stormy 2012 that saw growing trade friction between China and the US, I’m happy to see that 2013 is getting off to a better start with Washington’s approval of a potentially sensitive sale of a bankruptcy US technology firm to a Chinese buyer. Many readers will know that I’m talking about the case of A123 Systems, a former high-flying US battery maker that fell on hard times as new energy industries worldwide experienced a broader downturn in demand for their products.
Just a week after Canada approved the $15 billion purchase of oil exploration firm Nexen (Toronto: NXY) to Chinese rival CNOOC (HKEx: 883; NYSE: CEO), we’re seeing a couple of interesting new M&A deals in the energy sector, one involving policy lender China Development Bank and the other from Hong Kong-listed China Gas (HKEx: 384). The common theme is that many Chinese energy investors are relatively flush with cash right now, and are looking for bargains in a global sector where asset prices have become depressed due to lingering effects of the global downturn. But that said, these 2 deals are both quite different, with the first most likely being driven at least partly by Beijing while the latter looks like a more traditional private sector deal.
