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HindustanTimes Fri,22 Aug 2014

China shops big for firms abroad

Keith Bradsher and Michael J De La Merced, The New York Times, Hindustan Times  Hong Kong, December 12, 2012
First Published: 22:43 IST(12/12/2012) | Last Updated: 22:45 IST(12/12/2012)

Even as Wall Street deal makers await a revival of the moribund merger market, Chinese firms are shopping abroad with their wallets out.

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Yet they are also facing scrutiny, particularly in Washington, as Chinese corporate buying trips coincide with a growing assertiveness in its foreign policy.

So far this year, the dollar volume of Chinese acquisitions overseas is up 28% from the same period a year ago, according to Thomson Reuters data. That compares with a 2.8% slump in global merger and acquisition volume over all.

Chinese international acquisitions are ahead for the year despite a slump in the third quarter, as state-owned enterprises, the main Chinese buyers, and some private enterprises waited for a change in the country's political leadership at the Communist Party Congress in mid-November. But now, Chinese buyers are back.

Indeed, Beijing is pushing for additional deals, and has encouraged the state-controlled banking sector to finance them.

"An increase in overseas investment by Chinese companies is an inevitable trend," the commerce minister, Chen Deming, said at a conference two weeks ago.

Wanxiang Group agreed on Sunday to pay $256 million to buy most of A123 Systems, a bankrupt manufacturer of high-tech batteries. And a consortium of Chinese investors agreed on the same day to pay $4.2 billion for a controlling stake in the American International Group's aircraft leasing business.

On Friday, Canada approved the $15 billion acquisition of Nexen, an energy company, by the China National Offshore Oil Corporation (CNOOC).


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