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The Resistance to China's Overseas Mergers and Acquisitions Is Increasing

Released on: 2018-01-08 瀏覽:269次

Recently, German authorities took advantage of a new law to intervene in the Chinese acquisition of a small but innovative German aerospace company. The law expanded German government's power to deter Chinese investment in M&A in Germany's strategic economic fields. Specifically, a subsidiary of CISRI, a state-owned company, wants to acquire COTESA, a German-owned company that produces components for aircraft manufacturers such as Airbus and Boeing. According to German media reports, the purchase price is between 100 million to 200 million euros. However, the German Ministry of Economy has now intervened in the deal and "shelved it" on the ground of "confirming its compliance with Germany's foreign trade laws." In fact, the German government took the initiative last year to expand the blockade on Chinese companies' purchases of German companies on the background that Berlin is increasingly worried about the scale of China's M & A deals in Germany's high-tech industries. In addition, a series of jobs lost to German companies acquired by Chinese investors are believed to be one of the reasons. In fact, most Chinese overseas mergers and acquisitions projects are now under serious investigation of transactions globally. Last week, the U.S. Foreign Investment Commission (CFIUS) rejected a deal by China Ant Financial to buy MoneyGram, a U.S. remittance company, on the grounds that it poses "a threat to national security." The same CFIUS also stopped in mid-November 2017 China Zhongwang Group's acquisition of the US aluminum manufacturer ALERIS CORP's private equity deals. At the end of 2017, the Australian government had also refused to give Huawei submarine cables the right to land in its territory under the pretext of "national security." This series of cases all reflect the foreign policymakers' "tailor-made" policy on China's capital M & A projects, which is likely to continue in 2018 and is more likely to expand to other countries. This will pose a great impact on China's capital "going global" in the future.