China's Buyout Backlash Stalls Investments by Carlyle, Ewing

Dale Colling is learning just how serious economic security is for China. The chairman of ALC Advisors earlier this year brokered the sale of a Chinese manufacturer to a U.S. buyout firm.

Completion of the deal has been slowed because the company's products contain glass, which may be classified as a strategic material.

``We're told by the lawyers we may have to get special approval because the product uses a lot of glass,'' says Colling, 55, who is based in Shanghai and wouldn't name the companies involved since talks are continuing. ``Larger, more visible deals are going to be more difficult to get done.''

New takeover rules in China are crimping overseas buyout funds such as Carlyle Group and Ewing Management after lawmakers criticized the government for selling state assets too cheaply. Private equity and venture capital firms this year had raised $27.3 billion to invest in Asia as of Oct. 17, up from $23.2 billion in 2005, according to the Asian Venture Capital Journal.

``There appears to be a new sense of domestic nationalism -- under the guise of protecting national economic security -- which may have the effect of restricting foreign investment,'' says James M. Zimmerman, chairman-elect of the American Chamber of Commerce China.

Almost 70 percent of the $19.5 billion of acquisitions announced by overseas investors this year in China have yet to be completed, according to data compiled by Bloomberg. Last year, all but 25 percent of the $34.4 billion in purchases were cleared.

The country's nascent domestic private-equity industry, bolstered by new laws and state-sponsored funds, may get a boost from the restrictions on overseas investors, says Liang Meng, co- head of China investment banking at JPMorgan Chase & Co., which advised on six acquisitions in China this year.

600450 China's Buyout Backlash Stalls Investments by Carlyle, Ewing
Date: 27 December 2006

See more news about:

See more from these topics:

Others also read

As the world leading 100% fully tempered vacuum insulated glass, LandVac ensured the successful development of a military project.
Kohn Pedersen Fox (KPF) proudly supported the opening of MGM COTAI on Tuesday, February 13 2018. The resort is the latest addition to the MGM portfolio in Macau.
With various features including light weight, thin thickness, clear transparency, high safety, and extensive use in many aspects of building construction without regional limitation, LandVac has been well received by consumers.
As the launch pad for new products and technologies on window, door and facade in China, the 24th Windoor Expo will take place in Guangzhou from March 11 to March 13, 2018.
Considering the use of energy-saving glass as the determinant of a building’s power conservation, vacuum insulated glass currently offers the most outstanding performance in energy-saving. Among them, LandVac® is one of the best.
Recently, LandGlass is successfully selected into the list of the Innovative Large Enterprises of the City by the department of science and technology in Luoyang.

From industry

No. 160 Yichuan Rd.,
Jiaonan Shi
Qingdao Shi
Shandong Sheng, 266000

Add new comment