China’s grand plans help Advent to shore in Brazil 8 Sep 2017 The buyout firm is selling port operator TCP in a $1 billion deal. That is a good outcome after a recession and a currency rout, and the target fills a strategic gap for its Chinese state-backed buyer. China’s trading ambitions mean more overseas port deals should follow.
Insurance giants may get another chance in China 8 Sep 2017 The industry watchdog in Beijing is hinting it will further open the market for foreign firms like Chubb and Manulife. China’s market has long under-delivered for global insurers. After a recent shakeup of both the regulatory regime and business, this time may be different.
Best IPO looks to repackage Chinese logistics 7 Sep 2017 The Alibaba-backed group wants to list at a market value of $5 billion-plus. Best is growing fast and pushing into new businesses, but its core delivery operation still faces rising costs and fierce competition. A big premium to U.S.-listed rival ZTO is hard to justify.
Banks would be wise to tread carefully with HNA 7 Sep 2017 Goldman Sachs has halted pre-IPO work for a unit of the acquisitive Chinese group, Reuters says. That sounds prudent. China’s private M&A machines are out of favour in Beijing and under growing scrutiny abroad. A reshuffle meant to allay concerns about ownership did more damage.
China sets limits on fintech disruption 6 Sep 2017 A ban on crypto-currency initial coin offerings follows a similar U.S. crackdown. Like the SEC, Chinese regulators are trying to protect consumers and head off systemic risks. Keeping state control of a financial sector being eyed by Alibaba and others may be equally important.
China’s house rental push is past due 6 Sep 2017 Beijing wants more people to rent. Migrating from mortgages to leases could vent speculative pressure and put the critical property sector on a sustainable economic footing. Social customs and institutional interests will neutralise the initiative's effectiveness.
Pirelli’s mooted IPO valuation looks overinflated 5 Sep 2017 The Italian tyremaker plans to relist. Pirelli’s high-end business may deserve a premium to peers, but an estimated enterprise value of 12 billion euros, far above what owner ChemChina paid in 2015, looks optimistic. High debt and complex ownership may also spook investors.
China setbacks spoil Australia’s dairy strategy 5 Sep 2017 Aussie farmers have tried to milk China’s growing hunger for infant formula. Rising incomes and the end of the one-child policy made the $19 bln market seem appetising. As often happens in the People’s Republic, intense competition and tough local rules have soured the outlook.
Telefonica’s O2 float is best placed on hold 4 Sep 2017 The Spanish telco has been considering an IPO of its UK arm since regulators blocked a sale in 2016. A legal row over mobile spectrum auctions would complicate pricing, and debt is less pressing since Telefonica cut its dividend. Better to delay than cancel another offering.
Legend spins Silk Road yarn for Europe bank deal 4 Sep 2017 The firm behind Lenovo will pay $1.8 bln for Luxembourg’s BIL. That highlights corporate China’s continued appetite for foreign finance, even amid an M&A crackdown. Tying the deal to Beijing’s overseas goals may be politically astute, but will in reality be a bit of a stretch.
China-India spat signals last hurrah for BRICS 4 Sep 2017 The duo stepped back from a border dispute in time for a smooth summit of the emerging markets bloc. But Beijing’s focus on Belt and Road, its ambitious global infrastructure push, has it and India marching in opposite directions. That looks toxic for the alliance.
Congress will point way to China’s future 1 Sep 2017 An October date has been set for the biggest event in China’s political calendar: the twice-a-decade party congress. A reshuffle of the Communist Party’s top ranks will show how determined President Xi Jinping is to consolidate power – and hint at how long he plans to stay on.
Carrefour’s ills demand Tesco-like revamp and more 31 Aug 2017 The French supermarket said full-year operating profit could fall 12 percent, partly due to stiff competition at home. The grocer’s new CEO faces even more challenges than Tesco’s Dave Lewis did three years ago. Domestic market share is shrinking and its online offering is weak.
China’s big banks dig deeper into housing market 31 Aug 2017 ICBC, Bank of China, CCB and AgBank are extending new credit, though not as quickly as the wider financial system. Their restraint is welcome, as are signs of improving bad loans. But continuing to lend heavily into the country’s property boom could be storing up fresh trouble.
Water woes may leave green-car hopes high and dry 28 Aug 2017 Ford is the latest to ramp up electric-vehicle production with a deal in China. But the industry relies heavily on the Democratic Republic of Congo for a crucial battery material. Drought, abysmal infrastructure and conflict could put ever-increasing supply needs at risk.
Viewsroom: Fiat Chrysler’s painful choices 24 Aug 2017 Great Wall Motor wants to buy Jeep. That’d leave the Italian-American carmaker cash rich but devoid of profit in a fast-changing industry. Meanwhile, Uber tries to find a silver lining to the cloud its drivers are under. Plus: what makes China’s unicorns a different breed.
Tencent’s team has upper hand in Chinese food fight 23 Aug 2017 China’s three web giants are supporting rival food-delivery firms, in a big bet on “online-to-offline” services. The leader, Tencent-backed Meituan-Dianping, is cashed-up and looks unassailable. Even a mooted merger of its rivals could distract them and help bring subsidies down.
Jeep sale would leave Marchionne nowhere to hide 22 Aug 2017 The Fiat Chrysler CEO advocates using M&A to stop carmakers wasting precious capital. Selling the company's top brand to China's Great Wall - a long shot politically - might raise $23 bln. But it would leave an emaciated rump and set up Marchionne’s last lap to be a dismal one.
Fiat Chrysler would rev up China’s Great Wall 21 Aug 2017 The $19 bln Italian group has bid interest from the Chinese carmaker. Just as Geely’s takeover of Volvo helped it revamp designs, Great Wall could benefit from Fiat’s knowhow, especially at Jeep. But this could seriously stretch the buyer’s finances and management capacity.
China’s M&A controls trap firms in a warped market 21 Aug 2017 Officials have formalized guidelines curbing "irrational" purchases of foreign hotels, soccer clubs, film studios and so on. However, M&A is a small factor in China’s debt problem. Nor does this fix the margin-destroying distortions that encourage companies to venture overseas.