What If a Chinese SOE Offer to Buy a US Company Again?
For many years, China was ranked the number one destination for foreign domestic investment. Now the cash flow could reverse from an inward bound journey to an outward bound one. Take for example; the state-owned Aluminum Corporation of China joining Alcoa in a surprised 12 percent purchase of Rio Tinto. China is concerned that the combining Rio Tinto and BHP Billiton would create a monopoly and could cause a disruptive interference with China's iron ore needs. But what if the transaction were a Chinese State-Owned Enterprise (SOE) offering to buy an American firm? How would U.S. regulators feel about this? What rules would be invoked?
Will China Buy into BHP Billiton?
A rumor has erupted in the Australian media that China is planning to buy up a 9% or greater stake in miner BHP Billiton, Ltd., Australia's and the world's largest diversified resources company. The possible bid is being interpreted as an attempt to interfere in BHP's proposed acquisition of rival Australian mega-miner Rio Tinto, the world's second largest iron ore producer.
Chinalco Shouldn't Hinder Our Rio Tinto Bid, Says BHP Billiton
Australian iron ore giant BHP Billiton has made it clear that it is determined to pursue its bid for Rio Tinto, the other Australian mining behemoth, and that it hopes that Chinalco, China's state-owned leading aluminum producer, would not try to hinder the merger. Chinalco is publicly opposed to the merger, and last February, in partnership with America's Alcoa, scooped up a 12% stake in Rio Tinto to get a say in the company's future.
Air China Eyes Air Shanghai
After its unsuccessful attempt at strategic cooperation with China Eastern Airlines (CEA), Air China recently admitted that it has been in close contact with Air Shanghai, a major rival of CEA.
SWF-led Metal Mining Fund Proposed for China's Overseas Acquisitions
As the subprime crisis deepens and the China Investment Corporation (CIC), China's sovereign wealth fund, and other Chinese financial enterprises suffer growing losses from what they had hoped would be a fire sale of US assets, the question of where China should invest its $1.5 trillion of foreign exchange reserve remains a hot issue among Beijing's policy makers. Should CIC and the others invest their funds mostly in financial assets or real assets?
China's Capital Outflow: Facing Political Risks and Learning the Ropes
Chinese enterprises mainly use their own funds for their overseas investments. Government departments approve such investment plans according to the financial situation and asset liability ratio of the enterprise. After China's commercial banks have all finished their reform and gone public, their operation aims must be to maximize the interest of investors, including overseas share-holders. It will be impossible for them to disregard risks in support of overseas expansion of SOEs.
China Overseas Investments Shifting to Real Assets
The Chinese aluminum giant, Aluminum Corporation of China Limited (Chinalco), has bought a 9% stake in Rio Tinto for $14.05 billion, indicating that industrial investment has again become popular as part of China's overseas investment strategy.
Microsoft's Bid for Yahoo Means So Much for Alibaba
Bill Gates once said that Ma Yun (Jack Ma) would be the next Bill Gates. If Microsoft manages to purchase Yahoo, it will hold a 40% stake of the world's number one online marketplace for global and domestic China trade.
Chinalco Finesses Rio Tinto and BHP
China has become increasingly skilful and confident in securing, by international bidding, energy and strategic resources such as iron ore and aluminium.
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