In the last few years, China’s corporations have been on a relatively quiet and extremely rapid buying spree, spending more than $106 billion in 2015 to acquire stakes in overseas companies. The actions of Chinese corporations have been relatively uninhibited, but recently, amid growing concerns about national cybersecurity, President Obama’s decision to deny a Chinese investment fund’s acquisition of German firm Aixtron SE in early December has caught much attention. Although Aixtron is a German firm, US regulatory agencies had oversight over the deal since the company’s U.S. unit employs about 100 people in the US and generates about 20% of Aixtron’s total sales.
It is only the third foreign deal to be rejected by the White House in 25 years. But that doesn’t mean all other such prospective deals have been successful. Prospective foreign investments are usually abandoned by the corporations if the Committee on Foreign Investment in the US (CFIUS), which is responsible for vetting all foreign acquisitions of US corporations based on national security concerns, reports that there are unresolvable issues with the deal. Still, in 2016, China’s announced mergers and acquisitions (M&A) deals rivaled US M&A deals for the first time. And there has been even more activity in Europe, which does not have a regulatory agency with the CFIUS’s parallel duties and powers.
What will the pace of China’s foreign investment deals be like from now onwards? It’s difficult to predict the direction China’s acquisition deals will go from here. At home in the US, president-elect Trump has repeatedly taken a strong tone against business deals and trade with China. And Chinese government officials may also be seeking to end the deluge of foreign investment: in an attempt to relieve downward pressure on the yuan, they have placed restrictions on large acquisitions.
The following are just a few of the other deals that Chinese corporations have successfully (and not successfully) made.
China National Chemical’s & Syngenta: A still-pending deal announced in February 2016, China National Chemical would be paying it $43 billion for the Swiss pesticides giant.
Dalian Wanda Group & Legendary Entertainment: Billionaire Wang Jianlin’s group agreed to spend $3.5 billion for the Hollywood company behind the movie Jurassic World.
Qingdao Haier & GE’s appliances business: Qingdao made a deal in January 2016 for $6.1 billion.
Tsinghua Unisplendour & Western Digital: In September of 2015, Unisplendour announced it had plans to invest $3.8 billion in the California hard drive maker. But it chose to walk away from the deal rather than undergo a review by the CFIUS.
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