Tuesday, June 21, 2005
Here come the Chinese
A few days back, I had made a post about a possible Haier takeover bid of Maytag. The bid has now been confirmed, according to Bloomberg News, though Haier faces competition from Blackstone and Bain Capital, who are bidding for Maytag as well. The biggest China-related news of the day though is China National Off shore Oil Corp's (CNOOC) $20 billion bid for UNOCAL, beating a $16 billion bid by Chevron. Though I could be wrong, this is the biggest takeover bid I can remember from a developing country-based company.
Why are the Chinese on a buying spree? Paul Kaihla had some thoughts on the subject back in May.
Because Americans have spent $390 billion more on Chinese goods during the past three years than China has spent on U.S. imports, China is flush with dollars. And by 2010 it will surpass Canada as the largest U.S. trading partner. Meanwhile, the world's fastest-growing economy wants to lighten up on U.S. bonds and load up on corporate assets. The prime targets? American brands and manufacturers, as well as distributors that peddle Chinese goods. "The Chinese want to cut out the middleman by buying him," says John Rogers, a Chicago lawyer and investment banker.
Often, it's name recognition that Chinese companies crave, since a history of communism has left them relatively clueless about building brands.Shandong-based appliance maker Haier may be eyeing Maytag or GE's (GE) white-goods division, Straszheim says. Last year Hong Kong's Li & Fung bought New York-based Ralsey Group, which makes teen apparel labels including Rocket Girl; M&A specialists think the company might go after Bill Blass next.
How's India faring?
Tata Chemicals, whose bid for the Egyptian Fertiliser Company I had written about earlier, has now been outbid by the Egypt Kuwait Holding Com which bid $601 million to beat Tata's $519 million bid. In the meanwhile, Matrix Labs has acquired Belgium-based Docpharma NV for $263 million, making this the biggest acquisition by an Indian pharma company. And India's new bio-technology strategy will probably help this sunrise industry reach the ambitious targets it has set itself for 2010.
Why are the Chinese on a buying spree? Paul Kaihla had some thoughts on the subject back in May.
Because Americans have spent $390 billion more on Chinese goods during the past three years than China has spent on U.S. imports, China is flush with dollars. And by 2010 it will surpass Canada as the largest U.S. trading partner. Meanwhile, the world's fastest-growing economy wants to lighten up on U.S. bonds and load up on corporate assets. The prime targets? American brands and manufacturers, as well as distributors that peddle Chinese goods. "The Chinese want to cut out the middleman by buying him," says John Rogers, a Chicago lawyer and investment banker.
Often, it's name recognition that Chinese companies crave, since a history of communism has left them relatively clueless about building brands.Shandong-based appliance maker Haier may be eyeing Maytag or GE's (GE) white-goods division, Straszheim says. Last year Hong Kong's Li & Fung bought New York-based Ralsey Group, which makes teen apparel labels including Rocket Girl; M&A specialists think the company might go after Bill Blass next.
How's India faring?
Tata Chemicals, whose bid for the Egyptian Fertiliser Company I had written about earlier, has now been outbid by the Egypt Kuwait Holding Com which bid $601 million to beat Tata's $519 million bid. In the meanwhile, Matrix Labs has acquired Belgium-based Docpharma NV for $263 million, making this the biggest acquisition by an Indian pharma company. And India's new bio-technology strategy will probably help this sunrise industry reach the ambitious targets it has set itself for 2010.
