Bottom line: The collapse of a cross-investment between China’s Citic Bank and Taiwan’s CTBC Financial reflects growing cross-strait tensions, and could signal a chill in major new cross-strait investments over the next 4 years.
Citic Bank scraps Taiwan investment
In a troubling sign for companies doing business across the Taiwan Strait, an equity swap between China’s Citic Bank (Shanghai: 601988) and Taiwanese peer CTBC Financial (HKEx: 2891) has collapsed due to regulatory issues. In this case it appears that Taiwan scuttled the deal for reasons I’ll explain shortly, though a Citic spokesman emphasized no politics were involved. But regardless of the stated reasons, this particular development seems to reflect growing tensions between Taiwan and China under a new Taiwanese administration that’s far more wary of Beijing than its predecessor. Read Full Post…
Bottom line: ICBC is likely to ultimately get approval to buy 20 percent of Taiwan’s SinoPac Financial, while Bright Food’s newly closed purchase of Israel’s Tnuva should boost its bid to become China’s first global food group.
Bright Food closes Tnuva buy
I got a sense of deja vu on reading the latest announcement from ICBC (HKEx: 1398), saying China’s leading lender has extended a deadline to buy 20 percent of Taiwan’s SinoPac Financial (Taipei: 2890), 2 years after the tie-up was first disclosed. That’s because this deal looks strikingly similar to another proposed tie-up between leading Chinese telco China Mobile (HKEx: 941; NYSE: CHL) and one of its Taiwan peers, which ultimately crumbled after repeated extensions. In both cases political sensitivities undermined the deals, though such sensitives could play less of a role in the ICBC-SinoPac deal.
At the same time, I’ll also admit my surprise to read that another sensitive deal has closed that will see Shanghai-based food giant Bright Food Group buy Tnuva, Israel’s largest dairy. That deal was first announced about a year ago, but concerns were quickly raised that Israel might veto it over national security concerns. But the latest reports say the purchase has finally closed, handing Bright a major victory in its quest to become China’s first global food giant. Read Full Post…
My first reaction to reading the news that mobile carrier China Mobile (HKEx: 941) had formally scrapped a 4-year-old plan to buy a stake in Taiwanese peer Far EasTone (Taipei: 4904) was: What took them so long? In fact, I wasn’t even aware that China Mobile still even considered this tie-up alive, as the deal attracted controversy from the moment the 2 sides announced it in 2009. This formal scrapping of the deal does seem to represent a milestone of sorts, as it shows that we won’t see any M&A in the sensitive telecoms sectors across the Taiwan Strait anytime soon despite ever warming ties between China and Taiwan. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 3. To view a full article or story, click on the link next to the headline.
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ICBC (HKEx: 1398) To Buy 20 Pct of Taiwan’s Sinopac (Taipei: 2890) (HKEx announcement)
Paramount (NYSE: VIAb), China Movie Channel To Produce “Transformers 4” (English article)
China Telecom (HKEx: 728), Netease (Nasdaq: NTES) Partner on Mobile IM – Source (English article)
Baidu’s (Nasdaq: BIDU) Qunar Meets Resistance From Suppliers (Chinese article)
Class Action Suit Against Canadian Solar (Nasdaq: CSIQ) Dismissed (PRNewswire)
