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China Global M&A Push, 2005 ~ Nowadays

In new China M&A push, Oceanwide strikes $3.8 bln deal for ex-GE insurer Genworth
23 Hours Ago Reuters
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  • China Oceanwide Holdings pledged $3.8 billion in a deal to take control of U.S. insurer Genworth Financial, the latest marker of Chinese firms accelerating a drive overseas.
  • Founded by low-profile but well-connected billionaire Lu Zhiqiang, the Beijing-based investment firm agreed to pay $2.7 billion in cash to buy all Genworth shares, the firms said in a statement on Sunday. The price offers a modest 4.2 percent premium to Genworth's Friday closing price.
  • Oceanwide also committed another $1.12 billion to cover Genworth debt maturing in 2018, as well as life insurance claims charges faced by the firm spun out of General Electric in 2004.
  • Genworth has seen its share price fall nearly two-thirds in the last 24 months while battling low interest rates and trying to stabilise its troubled long-term health insurance arm.
  • The striking of a near-$4 billion deal by an unlisted Chinese firm that few outside the country know highlights how determined mainland buyers have become in a hectic year for chasing overseas assets. So far, 2016 has seen Chinese firms launch a record $181 billion of overseas mergers and acquisitions — about 70 percent more than the whole of last year.
  • Chinese investment holding firms have joined insurers like Fosun International and unlisted Anbang Insurance Group in leveraging accumulated capital to buy global assets. Some recent purchases have also come from Chinese property companies, keen to reduce reliance on their home market.
  • Some recent Chinese bids have attracted intense regulatory scrutiny overseas. But rarely has an insurance deal by a Chinese acquirer been blocked outright by international watchdogs, according to people familiar with these transactions.
Read the full story at http://www.cnbc.com/2016/10/24/in-n...s-38-bln-deal-for-ex-ge-insurer-genworth.html
 
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Germany Faces Tough Choices As China Funds Target Tech Sector
Germany's ability to protect its valuable tech sector faces stern challenge amid China's buying frenzy.

Martin Baccardax
Oct 24, 2016 3:07 PM EDT

Germany's ability to protect its technology firms from China-led takeovers could face a severe test in the months ahead as the government balks at selling key sector assets even as its seeks closer trade ties with the world's second-largest economy.

Germany's Economy Ministry withdrew its approval for a pending takeover of chip equipment maker Aixtron SE (AIXG) Monday, citing security concerns, despite having given the €670 million ($729 million) deal with the Fujian Grand Chip Investment Fund the nod on September 8. Shares in the group plunged 13.3% in Frankfurt following the announcement.

The setback comes at an awkward moment for the German government, however, as it prepares to send a trade mission to China next week in an effort to establish greater ties following the United Kingdom's decision to leave the European Union. More than 5000 German companies currently operate in China and bilateral trade between the two countries topped $175 billion last year.

China, meanwhile, has been slowly transitioning its outward direct investment from energy and resources to technology companies. Just two years ago, its $9.5 billion in buyouts and stakebuilding represented less than 10% of its ODI. That figure has ballooned to $26.5 billion so far this year and represents nearly a quarter of China's $122.7 billion in ODI, according to the American Enterprise Institute's China Investment Tracker.

The issue is especially acute for Germany, which is looking to ensure that its export-led economy won't be limited with respect to access to deep and lucrative markets in China while at the same time preventing a hollowing-out of its technology sector by having intellectual property and innovation transferred abroad via foreign takeovers.

Germany's present angst is not unlike the national debate seen in Canada over the sale of energy companies to China-based firms in the early part of the decade, which culminated in the takeover of Nexen Inc (NXN) by government-controlled CNOOC Ltd in 2012.

The $15.1 billion deal, alongside a smaller $6 billion approach for Progress Energy by Malaysia's Petronas, ultimately prompted Canada to change its approach to foreign state-owned enterprises buying domestic companies.

Controlling interest stakes, as well as outright takeovers, are now judged by the impact they have over the entire sector, not simply the acquisition target, with Canada retaining 'right of refusal' if it deems any deal is not in the national interest.

Germany is exploring a similar safeguard, although given its place at the heart of the EU, it's seeking to establish it via Brussels, not Berlin.

"We need to clarify whether we should not create the option to assess the interests of investors against the EU's industrial interests for sectors that can be of existential significance for the strategic future of the European economy," Germany's Industry Minister Sigmar Gabriel wrote in an op-ed in June.​

At present, Germany can only stand in front of an overseas takeover if it risks financial stability, public order or, perhaps more ephemerally, 'word peace'.

Big ticket deals such as the €4.5 billion sale of robotics expert Kuka to China's appliance maker Midea earlier this year and the stated interest Sanan Optoelectronics expressed in lighting technology firm Osram (OSAGY) , spun out of Siemens AG (SIEGY) in 2013 and now valued at €6 billion, have put the issue at the center of the country's industrial policy.

A more specific set of rules, or even new regulations that would give the term 'national interests' a broader and moving definition, as is the case in the United States, would certainly gift Germany policymakers with more control over the sale of key assets.

Balancing that against a need to maintain close - and growing - ties with the powerful Chinese economy may possibly more competitive.

Just as the UK began establishing its post-Brexit economic ambitions this fall, Prime Minister Theresa May approved a deal to build the country's first nuclear power plant in at least a generation - a $24 billion deal that will see China General Nuclear Power Corp working with France's EdF SA (ECIFY) .

Previous security concerns, her critics charged, were set aside in order to maintain economic links with Beijing, particularly after China's UK Ambassador, Liu Xiaoming, wrote in the Financial Times that rejecting the deal could put the "mutual trust" between the two countries jeopardy.

Germany might find itself in a similar dilemma now that it's having a second look at Aixtron.


https://www.thestreet.com/story/138...sector.html?puc=yahoo&cm_ven=YAHOO&yptr=yahoo
 
https://sg.finance.yahoo.com/news/us-warned-against-chinese-takeover-152005878.html

The German government withdrew its approval for a Chinese firm to purchase Aixtron, which makes semiconductor equipment, after the US secret services raised security concerns, a German media report said Wednesday.

Germany unexpectedly announced on Monday that it had reversed its stance on the 670-million-euro takeover ($730-million) by China's Grand Chip Investment, saying it was putting the deal back under review.

The German economy ministry said the decision was made after new "security-related information" came to light, but gave no further details.

Citing German intelligence sources, the Handelsblatt daily reported that the U-turn came after the US secret services intervened to block the deal.
 
Chinese buy world's largest mining project
Frik Els | 2 days ago

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Simandou, Guinea
With over two billion tonnes of reserves,
and some of the highest gradesfor direct-shipping-ore in the industry,
it has a back-of-the-envelope calculation value of more than $110 billion

World number two miner Rio Tinto is exiting the world's largest mining project, by selling its stake in Guinea's Simandou iron ore to partner Chinalco, potentially opening up a new path to development for the $20 billion project.

According to a statement by Melbourne-based Rio the deal is worth between $1.1 billion and $1.3 billion payable when Simandou starts commercial production and based on output. Rio says a final agreement could be inked within six months. In February this year Rio wrote down the value of Simandou by $1.1 billion, before deciding to shelve the project.

Rio owns 46.6% of Simandou south; Chinalco's stake is 41.3% and the Guinea government holds 7.5%. Earlier this month the World Bank's financing arm – the International Finance Corporation – sold its its 4.6% interest.

Rio has already spent more than $3 billion on the project having first acquired the property in the late nineties. With complete control, Beijing-based Chinalco may revive the stalled project, no doubt with the backing of the central government. In September Chinalco took private its Hong Kong listed mining arm, primarily focused on copper.

With complete control, Beijing-based Chinalco may revive the stalled project with the backing of the Chinese government

China consumes more than 70% of the world's seaborne iron ore and is on track to import one billion tonnes of the steelmaking raw material this year. Imports have gradually displaced domestic production, pushing dozens of Chinese iron ore mines into bankruptcy.

The shelving of the project has been devastating news for Guinea. Simandou by itself would've been the world's fifth-largest producer at 95 million tonnes per year.

Simandou with over two billion tonnes of reserves and some of the highest grades for direct-shipping-ore in the industry (66% – 68% Fe which attracts premium pricing) has a back-of-the-envelope calculation value of more than $110 billion at today's prices.

The initial agreement signed in May 2014 called for a new 650km railway across the West African country to Conakry, Guinea's capital in the north, plus a new deep water port at a conservatively estimated cost of $7 billion; infrastructure investments that would double the economy of the impoverished country.

The impoverished nation, which was one of the worst affected country's by the recent Ebolo epidemic, and is in dire need of infrastructure to develop other parts of the industry, particularly the export of bauxite, the primary ore used to manufacture aluminum. Bauxite represents some 80% of the country's export earnings. Chinalco is primarily an aluminum manufacturer.

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Guinean President Alpha Condé
inspects plans for a new port for Simandou ore exports in July 2014

Read more at:
http://www.mining.com/chinese-buy-worlds-largest-mining-project/
http://www.mining.com/fresh-blow-to-worlds-largest-mining-project/
 
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Lawmakers push to block Chinese takeover of US aluminum firm
Thursday, 03 November 2016 14:02

WASHINGTON: A group of US senators called on the government Wednesday to block the Chinese metals giant Zhongwang's takeover of a US aluminum processor for the auto and aerospace industries.


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Writing in a letter to Treasury Secretary Jacob Lew, the 12 senators said the China Zhongwang Holdings group, already reportedly under investigation over alleged import tariff avoidance, should be blocked from the $1.1 billion purchase of Cleveland-based Aleris Corp on national security grounds.

The Committee on Foreign Investment in the United States (CFIUS), chaired by Lew to review foreign investments in sensitive US businesses, should review and reject the deal, they said.

"Zhongwang's purchase of Aleris would directly undermine our national security, including by jeopardizing the US manufacturing base for sensitive technologies in an industry already devastated by the effects of China's market distorting policies," they wrote.​

The deal would create "serious risk that sensitive technologies and knowhow will be transferred to China, further imperiling US defense interests."

Zhongwang, China's largest aluminum processor, announced the deal to buy Aleris in August. Aleris processes aluminum for numerous industries, particularly the auto and aerospace sectors.

It has an auto industry plant in Duffel, Belgium and is building a new one in the southern US state of Kentucky. Aleris also makes aluminum parts for aircraft bodies and wings in plants in Koblenz, Germany and Zhenjiang, China.

The company also makes aluminum protective plating for military vehicles in Germany, a point on which the senators focused in their letter to Lew.

"Aleris's defense production demonstrates the type of specialized expertise and capabilities that provide the foundation for our defense industrial base," they said.​

"Aleris' R&D and technology are critical to current and long-term US economic and national security interests."

The company denied the deal would threaten national security, saying it represents "continued investment in the future of American jobs."

"Less than one percent of our sales go into defense applications, and none of those goods are produced in the United States," spokesman Jason Saragian said in a statement sent to AFP. "The technology to produce aluminum plate, which is used in some military applications, is standard production technology widely used in the aluminum industry."

The senators also argued that China's huge overcapacity in the aluminum industry has led to the decimation of the US industry and "contributed to the hollowing of our nation's industrial base."

Zhongwang has already courted controversy in the United States.

The company is under federal probes over alleged smuggling of aluminum into the country disguised as pallets in order to avoid steep punitive tariffs on the company, the Wall Street Journal reported.

The US government determined in 2010 that China Zhongwang benefited from illegal subsidies and was dumping its products on the US market.



http://www.brecorder.com/business-a...ock-chinese-takeover-of-us-aluminum-firm.html
 
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Deutsche Bank says sells China's Hua Xia Bank stake for $3.37 billion
Fri Nov 18, 2016 | 6:18am EST

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Deutsche Bank (DBKGn.DE) said on Friday it has sold its 20 percent stake in Chinese lender Hua Xia Bank (600015.SS) for a total sum of around 23.2 billion yuan ($3.37 billion) to PICC Property and Casualty Co (2328.HK).

The consideration for the shares is at the lower end of the 23 to 25.7 billion yuan range Deutsche was hoping to get when the sale was first announced late last year.

The 23.2 billion yuan includes dividends paid to Deutsche Bank earlier this year. A Deutsche Bank spokeswoman confirmed the stake transfer to PICC Property & Casualty and the sale price in an emailed statement to Reuters.

PICC said in a separate statement posted on the Hong Kong stock exchange that it paid 22.444 billion yuan ($3.26 billion) for the shares.

Separately, Beijing-based Hua Xia Bank said on Friday it has terminated a credit card cooperation agreement and other long-term strategic plans with Deutsche following the stake sale.

The Chinese bank added that it plans to set up a consumer finance company with registered capital of 500 million yuan.

Deutsche Bank said earlier this month the stake sale received regulatory approval. Germany's largest lender had said in September it would fight a $14 billion demand from the U.S. Department of Justice to settle claims it missold mortgage-backed securities, a shock bill that raised questions about its future.

(Reporting by Engen Tham and Matthew Miller in Beijing; Editing by Muralikumar Anantharaman)


http://www.reuters.com/article/us-huaxia-bank-m-a-deutsche-bank-sale-idUSKBN13D18S
 
China's Fosun to buy into Portuguese lender BCP
Xinhua, November 21, 2016

Portugal's Securities and Exchange Commission (CMVM) has approved an offer by Chinese conglomerate, Fosun, to buy a 16.7 percent stake in Portuguese lender Banco Comercial Portugues (BCP), the CMVM said in a statement on Sunday.

Fosun is buying a 16.7 percent stake into BCP, Portugal's largest listed bank, becoming the bank's biggest shareholder, for 175 million euros(185.50 million U.S. dollars).

The Chinese group has said the acquisition will help it extend business in Europe and Africa.

Fosun has also said it plans to raise its stake by 30 percent in the near future.

Portuguese banks have been selling stakes to clear bad loans and boost capital.
 
China's Fosun builds stake in Portugal's biggest bank
Published November 21, 2016
Associated Press


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LISBON, Portugal – Shares in Banco Comercial Portugues, Portugal's biggest listed bank, have surged after China's Fosun took a stake that has made it the bank's biggest shareholder.

BCP S.A. shares were up more than 3 percent late morning trading Monday on the Lisbon stock exchange at 1.3 euro.

Like most of Portugal's banking sector, which is weighed down by bad loans, BCP has struggled to make a profit in recent years. Analysts say Fosun, which has invested heavily in Europe, has the financial clout to help BCP recover.

BCP said Fosun paid 175 million euros ($190 million) for 16.7 percent of the bank's capital. Fosun is considering extending its stake to around 30 percent.

The Shanghai-based conglomerate owns Club Med and other businesses in Europe, including Portugal's biggest insurance company, Caixa Seguros.

Read more at http://www.foxnews.com/world/2016/11/21/china-fosun-builds-stake-in-portugal-biggest-bank.html



China's Fosun to become biggest shareholder in Portuguese bank BCP
AFP November 21, 2016

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Lisbon (AFP) - Chinese conglomerate Fosun will become the biggest shareholder in the ailing BCP, Portugal's biggest private bank, by agreeing to buy a 16.7 percent stake, the two sides said Sunday.

Fosun is paying nearly 175 million euros ($185 million) via a capital increase after an agreement reached on Friday.

Portugal's banking sector is saddled with debt and bad loans and had to be rescued twice by the state since 2014.

Fosun said it aims to increase its shareholding in BCP to around 30 percent.

"The transaction is expected to extend the group's international network and help the group enter the Poland, Mozambique, Angola and Switzerland financial markets rapidly," Fosun said in a statement. Mozambique and Angola are former Portuguese colonies.​

Angola's state oil company Sonangol was up until now the largest shareholder in BCP with a stake of 17.84 percent, followed by Spanish bank Sabadell with 5.07 percent.

But after the dilution of BCP's existing capital Fosun will become the largest shareholder with its 16.7 percent stake.

Fosun, China's largest privately-owned conglomerate, is already present in Portugal with stakes in the insurer Fidelidade and medical services group Luz Saude.

Read more at https://www.yahoo.com/news/chinas-f...r-portuguese-bank-bcp-175039247--finance.html

 
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Hua Xia Bank spent alot more in buying Deutsche Bank than Fosun in buying Banco Comercial Portugues. It's fair that asset prices in PIIGS are cheap, so more M&A may go hunting in this region.
BUY PIIGS!
Portugal, Italy, Greece, Spain, Ireland!
 
BUY PIIGS!
Portugal, Italy, Greece, Spain, Ireland!


A lot of deals are done, like this

Greece’s Largest Port Taken Over By Chinese Firm
Published time: 11 Aug, 2016 12:11

China’s COSCO Shipping group has completed the acquisition of a 51 percent stake in the Greek port of Piraeus, becoming the controlling shareholder.

The company has paid $311 million for its major stake in Piraeus and plans to increase its share to 67 percent over the next five years. COSCO thus takes over Piraeus’ management and operation.

“The Piraeus project represents a key milestone in the Belt and Road initiative, and the port’s growth and prosperity will boost economic development both in China and Greece, ushering in a new era of trade cooperation and cultural exchange between east and west,” said CEO of COSCO Shipping Wan Min.​

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Read more at https://www.rt.com/business/355523-cosco-stake-greek-port/
 
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