Keeping an eye on Communist, Totalitarian China, and its influence both globally, and we as Canadians. I have come to the opinion that we are rarely privy to truth regarding the real goal, the agenda of Red China, and it's implications for Canada [and North America as a whole]. No more can we rely on our media as more and more information on China is actively being swept under the carpet - not for consumption.
Wednesday, February 24, 2016
China is buying up American companies fast, and it's freaking people out
And the most contentious deal so far might be the Chinese-led investor group Chongqing Casin Enterprise's bid for the Chicago Stock Exchange.
A deal spree
To date, there have been 102 Chinese outbound mergers-and-acquisitions deals announced this year, amounting to $81.6 billion in value, according to Dealogic. That's up from 72 deals worth $11 billion in the same period last year.
And they're not expected to let up anytime soon. Slow economic growth in China and cheap prices abroad due to the stock market's recent sell-off suggest the opposite.
"With the slowdown of the economy, Chinese corporates are increasingly looking to inorganic avenues to supplement their growth," Vikas Seth, head of emerging markets in the investment-banking and capital-markets department at Credit Suisse, told Business Insider earlier this month.
Kim Kyung-Hoon/ReutersPresident Obama and President Xi Jinping.
The law firm O'Melveny & Myers recently surveyed their mainly China-based clients and found that the economic growth potential in the US was the main factor making it an attractive investment destination.
Nearly half of respondents agreed that the US was the most attractive market for investment, but 47% felt that US laws and regulations were a major barrier. They'd be right about that. A major barrier
"I would be very surprised if CFIUS did not have an interest in taking a look at this deal," said Anne Salladin of law firm Stroock & Stroock, referring to the Chicago Stock Exchange deal.
Also this week, California-based Fairchild Semiconductor refused an offer from the state-backed China Resources and Hua Capital,the Financial Times reported.
They bid $2.6 billion for the company, but Fairchild turned it down, citing concerns about US regulators, and accepted a lower bid from a US-based rival.
While not all the companies doing the buying are state-owned enterprises, they do need to have the full backing of the Chinese government in order to close foreign deals. That's because they need approval to get enough foreign exchange to pay for the acquisitions, something the government monitors closely.
Given the recent volume of deals, though, it would appear that the Chinese government is supportive of the foreign-buying spree. That may be exactly what has folks so worried.