Bottom line: Midea’s plan to buy 30 percent of German robotics maker Kuka is likely to collapse due to EU resistance, reflecting growing wariness towards China’s global buying spree of western technology.
EU official sounds alarm at Midea’s Kuka buy
Alarmism at China’s growing string of global M&A is spreading from the US to Europe, with growing signs of resistance to the recently announced purchase by Chinese company of a major stake in a leading German robotics firm. Two separate new headlines point to the nascent resistance against the landmark deal announced 2 weeks ago, which would see Chinese home appliance maker Midea (Shenzhen: 000333) acquire 30 percent of Germany’s Kuka (Frankfurt: KU2G) for more than $1 billion. (previous post) According to the latest reports, a top European Union (EU) industry official and one of Kuka’s largest shareholders are separately expressing reservations about the deal, in what almost looks like a coordinated effort to show the uneasiness some Europeans are feeling. Read Full Post…
The following press releases and news reports about China companies were carried on March 16. To view a full article or story, click on the link next to the headline.
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Zoomlion (HKEx: 1157) Sweetens Offer for US Crane Maker Terex (NYSE: TEX): Sources (English article)
Anbang wins US Security Panel OK to Buy Fidelity & Guaranty (English article)
Midea (Shenzhen:000333) to Buy Toshiba (Tokyo: 6502) White Goods Unit – Source (Chinese article)
China’s Consumer Rights Show Trains Sights on Local Food-Delivery Site Ele.me (English article)
JD.Com (Nasdaq: JD) Gains on Alibaba as Spending Jumps, Profit Estimates Drop (English article)
Bottom line: Turmoil in the Republican Party could claim a growing number of proposed Chinese acquisitions of US firms as victims, as Republican candidates turn to China bashing to curry voter favor before November elections.
Opposition grows over Terex sale to Zoomlion
Election year politics could soon claim their latest victim in M&A between the US and China, with 2 more congressmen expressing their concerns about Chinese construction equipment giant Zoomlion’s (HKEx: 1157; Shenzhen: 000157) talks to purchase US crane maker Terex (NYSE: TEX). This development doesn’t surprise me very much, especially since the latest 2 lawmakers to joint the anti-China movement are both Republicans seeking to curry favor with voters on this relatively simple issue as their own party sinks into chaos.
I don’t usually write in much detail about US politics, since the intricacies of elections aren’t that relevant to China trade. But in this particular election, growing chaos within the Republican Party could soon create anti-China rhetoric that’s louder than usual. That’s because many Americans could quickly become frustrated with the Republican Party’s infighting, which could hurt its candidates’ election prospects. That could leading many Republican candidates to try to win voter favor by rallying around the relatively safe concern about China’s growing global influence. Read Full Post…
Bottom line: National security concerns are likely to torpedo pending sales of crane maker Terex and the Chicago Stock Exchange to Chinese buyers, while a similar sale of Ingram Micro shouldn’t draw as much scrutiny.
Terex, Chicago Stock Exchange sales draw national security concerns
Just a day after chip maker Fairchild (NYSE: FCS) called off talks to be purchased by a Chinese buyer over concerns that Washington would veto the deal, 2 other similar planned acquisitions of US firms are coming under the microscope. In the more ominous of the new developments, a group of 46 US congressmen have expressed reservations about a deal announced last week that would see a little-known Chinese company buy the Chicago Stock Exchange.
The other development has a single US congressman expressing similar reservations about a deal that would see Chinese construction equipment maker Zoomlion (HKEx: 1157) buy US crane maker Terex (NYSE: TEX). At the same time, yet another major deal that could draw similar national security scrutiny is in the headlines, with word that a company connected to private equity investor HNA Group has offered to pay $6 billion for computer and component distributor Ingram Micro (NYSE: IM). Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 18. To view a full article or story, click on the link next to the headline.
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China’s Zoomlion (HKEx: 1157) Bids for Terex, Stokes US National Security Fears (English article)
Marriott (NYSE: MAR) Enters China Mid-Range Hotels, Targets 100 Fairfield Hotels by 2021 (Chinese article)
Ingram Micro (NYSE: IM) to Be Bought by Tianjin Tianhai for $6 Bln (English article)
Jumei (NYSE: JMEI) Announces Receipt of Going Private Proposal (PRNewswire)
Didi, Lyft to Launch Joint Car-Ordering Platform Within 3 Months – Lyft CEO (Chinese article)
Bottom line: Washington and Beijing risk seriously hindering global trade and M&A in high-tech products in the name of national security, and should be more transparent when blocking deals and trade over such concerns.
National security vetoes look increasingly protectionist
The national security debate was in 2 major headlines last week, as word emerged that Washington might consider blocking proposed major acquisitions of US companies by Chinese construction equipment giant Zoomlion (HKEx: 1157; Shenzhen: 000157) and memory chip maker Tsinghua Unisplendour. While neither deal has been vetoed yet, the talk comes less than a year after several Washington politicians expressed reservations that ultimately killed another deal by a Chinese company to purchase leading US memory chip maker Micron (Nasdaq: MU).
With the US entering an election year, the likelihood of more deals being killed for similar reasons could grow due to opposition from politicians seeking to curry favor from voters. The growing noise from Washington comes against a backdrop of similar moves by Beijing, which last year rolled out a new national security law that foreign technology firms said was overly invasive and discriminates against them. Read Full Post…
Technology giant Legend Holdings has grabbed headlines in recent days with news of a record investment by its private equity arm in a leading British pizza chain, its first major overseas foray. The deal saw Legend’s Hony Capital agree to pay $1.6 billion for the PizzaExpress chain, as part of a growing trend by Chinese firms to invest in the overseas food and retail sectors.
The purchase comes as Legend gears up for an IPO as early as later this year, offering investors a chance to buy into a diversified group whose biggest asset is its controlling stake in PC giant Lenovo (HKEx: 992). But the bigger headline in the Legend story is reports that the company is strongly considering staging its listing in Hong Kong rather than its native China. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 27. To view a full article or story, click on the link next to the headline.
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MIIT Issues First Batch of Virtual Network Operator (VNO) Licenses (Chinese article)
Didi Dache Wins $100 Mln Funding from Tencent (HKEx: 700), Citic – Source (English article)
Japan Car Makers Brace For China Backlash To Shrine Visit (English article)
China’s Zoomlion (HKEx: 1157) Acquires German Dry Mortar Producer
US IPO Window To Reopen foF Chinese Companies in 2014: Report (English article)
A small brouhaha has broken out in the Chinese media these last few days over what looks like perhaps the clumsy beginning of a takeover attempt involving Zoomlion (HKEx: 1157; Shenzhen: 000157) and Sany Heavy (Shanghai: 600031), China’s 2 top construction equipment makers. I’m not quite convinced that this was a real takeover attempt, as the numbers involved are quite small. But whatever happened, the instance was a reminder that Chinese firms are still quite clumsy at unsolicited M&A, especially the hostile type. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 27. To view a full article or story, click on the link next to the headline.
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ZTE (HKEx: 763) Sees Return To Profits Amid 4G Build-Out – Official (Chinese article)
