China said a review of the $1.6 billion bid by Japan's Mitsubishi Rayon Co to buy unlisted British chemicals maker Lucite International was moving ahead, despite reports the deal had hit a snag.
The approval procedure will continue according to the framework laid out in China's anti-monopoly law, Ministry of Commerce spokesman Yao Jian told reporters on Wednesday. "China is still following proper procedures for approval," he said.
Beijing can scrap the deal even though neither company is based in China, because both Mitsubishi Rayon and Lucite have sales and manufacturing operations in the mainland, where their sales exceed around $60 million.
On Monday, two people who had been briefed on the matter told Reuters that Chinese regulators had delayed approval of the deal. Regulators worldwide are moving to protect local industry as big overseas players consolidate to grab bigger pieces of a shrinking economic pie.
China has also come under criticism for blocking access to its markets. Last month, it rejected a $2.4 billion bid by Coca-Cola for China's biggest juice maker, Huiyuan Juice, on the grounds that the merger violated the anti-monopoly law. Lucite and Mitsubishi Rayon have a relatively high market concentration in the chemical sector, said Yao.
Lucite is the world's top maker of methyl methacrylate (MMA) monomers, used in the production of acrylic resins that are used in products ranging from liquid crystal displays to car lights.
Mitsubishi Rayon, Asia's top maker of MMA monomers, had planned to complete the deal by the end of January, to gain access to production bases in the United States and Europe and speed up expansion worldwide. "The anti-monopoly law provides a procedure for approval, and we will follow the normal timeline," he said. Yao also said that China welcomes foreign investors to acquire and merge with Chinese companies.