China shops big for firms abroad
Even as Wall Street deal makers await a revival of the moribund merger market, Chinese firms are shopping abroad with their wallets out.business Updated: Dec 12, 2012 22:45 IST
Even as Wall Street deal makers await a revival of the moribund merger market, Chinese firms are shopping abroad with their wallets out.
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).