China DealBook
A Newsletter on Deal Making in China

By: ChinaDesk | March 11, 2017

A Newsletter on Deal Making in China | M&A . Investment Banking .VC . PE . Deals

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Source:TheWrap

Deal News


Forget Trump – It’s Chinese Regulators Who Are Putting Squeeze on China’s Hollywood Deals
China’s Hollywood invasion, seems to have finally run into an obstacle it can’t get past: the country’s own regulators.

New restrictions on cash leaving the country have put a major wrench in cross-border deals with Paramount, Legendary and Dick Clark Productions.

Chinese copper company Anhui Xinke New Material’s planned $350 million purchase of Voltage Pictures was called off in December.

 

Wanda's $1 billion deal to buy Hollywood's Dick Clark scrapped
Eldridge Industries, the U.S. owner of Dick Clark Productions Inc, said on Friday that one of its affiliates terminated an agreement to sell off the TV production company to Chinese conglomerate Dalian Wanda Group.

 

Insiders told TheWrap that issues with getting currency out of China and passing muster with the country’s regulators doomed the deal, which would have given China ownership of the company that produces television staples including the Globes and American Music Awards among other franchises.

 

Chinese acquisition delay threatens Paramount's $1B financing deal
It was a $1 billion, three-year deal from two China companies that was supposed to pump money in the Paramount Pictures coffers. The pair at the center of that deal are Huahua Media and Shanghai Film Group.

 

The deal's in jeopardy as regulatory issues have delayed a planned acquisition of Huahua Media by Oriental Time Media. Oriental Time agreed in November to pay about $158M for Huahua, but withdrew its offer yesterday amid dozens of questions from the China Securities Regulatory Commission. And that will prevent Huahua from funding the $1B Paramount deal.

 

Hubei Sanfeng Intelligent Conveying Equipment to acquire Shanghai firm for 2.6 bln yuan
Hubei Sanfeng Intelligent Conveying Equipment Co Ltd plans to acquire auto parts firm Shanghai Sinylon for 2.6 billion yuan ($376.37 million). Sanfeng plans to raise up to 940 million yuan in share private placement for acquisition.

 

China's HNA Group looks to hike Deutsche Bank stake: sources
Chinese conglomerate HNA Group would like to increase its stake of 3 percent in Germany's Deutsche Bank, two sources with knowledge of the matter told Reuters.

 

China's CEFC courts "teapots" for first domestic refinery acquisition
Privately-run conglomerate CEFC China Energy has approached several independent Chinese oil processors seeking to acquire its first domestic refinery operation, its next move towards becoming a global integrated oil player.

 

CEFC China Energy is a rapidly growing oil and finance conglomerate with assets across the world and an ambition to become one of China's energy giants. --CEFC signed a deal in December with KMGI, a unit of Kazakh state oil and gas firm KazMunayGaz to proceed with a $680 million deal.

 

Yingde shareholders vote to keep two co-founders on board: sources
A majority of Yingde Gases Group's shareholders voted to keep two of its co-founders and main shareholders on its board and oust five other board members, ending a four-month battle for control of the $1.5 billion company.

 

Amid the power struggle, China's largest industrial gases company is in play, with U.S. industrial gas maker Air Products making a takeover approach, and Hong Kong-based private equity firm PAG agreeing to buy a substantial stake.

 

State-Owned Creditor Seeks to Reorganize State-Owned Mining Company
A state-owned mining company in Jilin province may be forced into bankruptcy by one of its state-owned creditors, an unusual move that has caught other creditors by surprise and raised concerns about whether their interests will be protected. Jilin Jien Nickel Industry Co. Ltd.

 

Bankruptcies are becoming more common in China as Beijing looks to eliminate so-called zombie companies, especially in the mining sector, which suffers from overcapacity. But one SOE pushing another that has the same actual controller toward bankruptcy is unusual.

 

Ping An leads Series C for Singapore’s Bigo Live
Bigo Live, a Singapore-based social video streaming app, has raised a Series C round of funding from a Hong Kong-based investment arm of Ping An Insurance Group. Financial terms weren’t disclosed. The round brings Bigo's total funding to $180 million to date and its valuation to $400 million.

 

Deutsche Bank's Qatar, China Investors Said to Back Rights Offer
Qatar’s royal family and China’s HNA Group Co., two of Deutsche Bank AG’s biggest investors, plan to buy shares in the lender’s 8 billion-euro ($8.4 billion) rights offer with a view to increasing their stakes, according to people with knowledge of the matter.

 

China's Fosun Pharma set to join bidding for Germany's Stada: sources
China's Shanghai Fosun Pharmaceutical is planning a bid for German generic drugmaker Stada, already the center of a 3.6 billion euro ($3.8 billion) takeover battle between two private equity consortia.

 

Fosun Pharma is also holding early-stage talks with buyout funds including CVC about a potential joint bid, but may decide initially to go it alone. Stada is expecting to receive so-called confirmatory bids from a consortium comprising Advent and Permira as well as from rivals Bain and Cinven, who have teamed up as well, on Friday.

 

China Huarong to be First Chinese ‘Bad Bank’ to List Onshore
As Beijing seeks to revitalize stock offerings, China Huarong Asset Management Co., the nation’s largest distressed-debt manager, secured official blessing for a mainland listing next year, Chairman Lai Xiaomin said Tuesday.

 

Chinese Installment Payment Platform Fenqile Plans $600M US IPO
Shenzhen-based installment payment e-commerce platform Fenqile aims to raise around US$600 million via an initial public offering on a U.S. stock exchange later this year, according to media reports citing insiders.

 

Major LeEco Investor China Bridge Cuts Stakes In Listed Unit Leshi
China Bridge Capital, a Beijing-based investment firm with RMB4.8 billion (US$690 million) under management, has further reduced its shareholding in Leshi Internet Information & Technology Corp.

 

Alibaba seeks $5 billion loan amid tech financing rush: Basis Point
Chinese e-commerce giant Alibaba Group Holding Ltd is in talks with banks to raise $5 billion in new funding, sources told Thomson Reuters' Basis Point, amid a flurry of fund-raising by China's tech giants.

 

China's Tencent seeks $2 billion loan amid investment drive: Basis Point
Chinese tech giant Tencent Holdings is in talks with banks to raise up to $2 billion in new debt funding, Basis Point reported, citing three people familiar with the financing plans, amid a flurry of fund-raising by China's internet giants.

 

Foxconn not favored bidder for Toshiba's chip unit due to China link: sources
Taiwan's Foxconn, the world's largest contract electronics maker, is not a favored bidder for Toshiba Corp's memory chip business due to its close ties with China, sources with direct knowledge of the deal said.

 

China's Wanfeng Eyes U.S. Acquisitions Amid Trade Tensions
Rising trade tensions are pushing Chinese car-wheel maker Wanfeng Auto Holding Group to seek further acquisitions in the U.S. to help localize more production and cut its reliance on imports. The Xinchang-based auto parts supplier is in talks to buy a machinery company in the U.S., and is open to purchasing a business in the financial industry.

The group has bought U.S. robotic assembly-line maker The Paslin Co. and Canadian magnesium die-castings firm Meridian Lightweight Technologies over the past three years.

 

China’s Baidu plans a spin-off of robot cars
Baidu Inc.’s billionaire founder Robin Li has shed more light on the Chinese search giant’s plans to sell robot cars around the world, revealing his intention to spin off its driver-less car division once it reaches maturity to attract funding and partners.

 

Legend leads $36m round for China truck logistics platform
Legend Capital has led a RMB250 million ($36 million) Series C round for Fuyoukache, a Beijing-based online truck logistics platform.

 

Hong Kong PE buys into US-HK entertainment merger
CCEF managed by Co-High Investment Management, a Hong Kong-based private equity firm focused largely on culture and media, has agreed to invest in a film production company formed through a US-Hong Kong merger.

 

Hollywood-based film finance and production company Sidney Kimmel Entertainment (SKE) has merged with Hong Kong’s Ivanhoe Pictures, an international local-language content company to form SK Global.

 

Matrix leads $15m Series C for China’s Easemob
Matrix Partners China has led a RMB103 million ($15 million) Series C round of funding for Easemob, a Chinese start-up that provides instant-messaging services to mobile app developers. Government-backed group Yin Tai Jai He Capital also invested in the round, a statement said.

 

'Source Close To Geely' Calls Tesla/Geely/Kandi Story 'Mental'
A long article appeared yesterday on the stock-picker site Seeking Alpha, suggesting a Chinese ménage a trois of some sort between California carmaker Tesla, Chinese carmaker Geely, and Kandi, Chinese maker of the Kandi EV small electric city car. But the trouble is: It's not even fake news, it's pure baloney.

 

China’s Didi Chuxing opens U.S. lab to develop AI and self-driving car tech
The global talent war for top artificial intelligence (AI) talent just got more intensified, as Chinese ride share giant Didi Chuxing officially launched an AI lab in California to attract top engineering talents to advance transformation in the global transportation industry.

 

 

IM Global Inks Output Deal With China’s Enlight Pictures
As it continues to ramp up its activity in China, IM Global has signed an output deal with production and distribution outfit Enlight Pictures to handle worldwide sales outside of the Middle Kingdom on the company’s upcoming slate.

 

Chinese overseas investments in sports & entertainment surge 188% in 2016

China's volume of international trade in cultural products and services reached $88.52 billion last year, achieving a surplus of $68.8 billion, new Ministry of Commerce statistics show.

 

China And Hong Kong Doubled Fintech Investment In 2016, Passing US For The First Time
China surpassed the U.S. in financial technology (fintech) investment for the first time in 2016, according to Accenture’s analysis of data from CB Insights, the authoriative global venture-finance data and analytics firm. Fintech financing in Asia-Pacific doubled to $11.2 billion from $5.

 

CGGC plugs into project in Pakistan
China has contracted to build a hydroelectric power project in Pakistan, with the first phase of investment reaching $2.5 billion. China Gezhouba Group Co Ltd has agreed to invest more than $1.72 billion for the construction of the main works of the 5,400MW Dasu hydropower project in the country.

 

 

Companies/People

 

 

Chinese-Owned Robot Maker Is Gunning for No. 1 in Booming Market
Kuka AG, the German robot maker acquired last year by Midea Group Co. of China, needs to lower costs and win government recognition as a local brand to achieve its goal of becoming the No. 1 supplier in the Chinese market, according to an executive.

 

Yingli Could Be Circling The Drain
Yingli has been a distressed company for over a year. The Company has been in default, selling off assets, and renegotiating debt since 2015. The Company has no equity and no means to pay off its debt. Latest PR indicates Yingli may be close to folding. Not good news for ADS holders but other players such as JinkoSolar, Canadian Solar, JA Solar will be the likely beneficiaries.

 

Chinese Bike Sharing Firm Ofo Upgrades Fleet Using 700Bike Design
Chinese bike sharing company ofo has added a new type of bike to its fleet, the ofo Curve, in conjunction with a Beijing-based bicycle designer, manufacturer 700Bike, the company said at a press conference.

 

Chinese dating app Momo sees record revenue growth thanks to live streaming
Momo, China’s top location-based social networking app, has continued its impressive user growth from last year and added solid financial figures to back it up, according to its most recent earnings report. The company, which was previously backed by Alibaba, went public when it listed on Nasdaq in December 2014.

 

Meet the Chinese billionaire CEO who chose to open shop in Ohio
Americans in Moraine, Ohio are working again, thanks to an enormous new factory that opened last year. But the company that owns the operation isn’t local — or even American. Ceo Dewang, the chairman of Fuyao — one of China’s largest autoglass companies — chose Moraine for the factory, an old General Motors plant that left almost 1,100 people without jobs when it closed in 2008.

 

Yirendai CEO on Peer-to-Peer Lending Landscape in China
Yirendai CEO Yihan Fang discusses how the company plans to navigate China's tighter regulations on the peer-to-peer market. She speaks with Bloomberg's Selina Wang.

 

Ctrip CEO Sets Up Scholarship At Alma Mater University Of Florida
Sun Jie, chief executive officer of Chinese online travel giant Ctrip.com, is setting up a scholarship at the University of Florida, where she studied nearly three decades ago when she was a poor international student.

 

 

Other Updates

 

 

Beijing Targets Stability, Continues Delicate Balancing Act In Annual Policy Meeting
The Chinese government continues to be steered in a direction of long term stability, as Beijing signals desires to extend a delicate balancing act to sustain economic growth while pushing forward its reform agenda during an annual policy meeting.

 

In Tightening Credit Controls, PBOC Chief Signals Policy Shift
China’s central banker signaled a tighter hold on credit to avoid further fueling asset bubbles, though the bank stands ready to loosen its grip should the economy falter.

 

CBRC Asks Banks to Carry Out Credit Risk Assessments
The China Banking Regulatory Commission (CBRC) has asked banks to monitor credit risks in their businesses related to loans, bonds, investments, lending to financial institutions and off-balance-sheet activities amid rising concerns over the stability of the financial system.

 

Regulators Bolster Disclosure Requirements for New Insurers
Insurance regulators reiterated Thursday that shareholders of proposed new insurers are required to disclose relevant preliminary information on a designated website, including proposals for setting up new insurers, sources of funding, and any connections among the shareholders.

 

Shanghai FTZ to open financial sectors wider to foreign capital
Shanghai is likely to ease limits this year on foreign investment in the banking, securities brokerage, securities fund management, futures trading and insurance sectors, according to China (Shanghai) Pilot Free Trade Zone on Thursday. The move is in line with the launch of updated guidance on foreign investment in the free trade zone.

 

China Studying Possible Shanghai-London Stock Connect
Chairman of China Securities Regulatory Commission Liu Shiyu said the country is doing research on the possible connection between the world’s fourth and fifth largest bourses by value.

 

China busts first market manipulation case under Shanghai-HK stock link
China has busted the first cross-border market manipulation case under the Shanghai-Hong Kong Stock Connect, the China Securities Regulatory Commission (CSRC) said Friday. The CSRC accused the perpetrators of repeatedly manipulating share prices including that of Zhejiang China Commodities City Group Co.

 

Hong Kong set to invest HK$1.2 billion for stake in Asian Infrastructure Investment Bank
The city’s government will soon seek approval from the Legislative Council to buy HK$1.2 billion worth of shares in the Asian Infrastructure Investment Bank (AIIB) over five years, in the clearest sign of the city’s participation in the institution.

 

China joint infrastructure projects get nod to issue securities: regulator
China's stock market regulator said on Friday that several infrastructure projects which use a public-private partnership (PPP) model have been approved to issue securities, letting them tap a new source of funding.

 

Can Singapore handle the heat from Chinese bike-sharing startups?
Having secured large investments from large corporations, China bike-sharing startups are ready to start their overseas expansion in Southeast Asia. Though not very surprising, Mobike and ofo have chosen the island city of Singapore to start their Southeast Asia expansion.

Category: Daily Newsletter 

Tags: Midea, Kuka, Baidu, Venture Capital, Alibaba, Fosun Pharma, China Newsletter, Wanda, Tencent, Didi Chuxing, Ofo, Geely, Legend Capital, LeEco, Dick Clark Productions, CSRC, Mergers, Acquisitions, HNA Group, Deutsche Bank, Matrix Partners China, Private Equity, Air Products, Yingde China, CVC Capital Partners, Paramount Pictures, Shanghai Film Group, Huahua Media, IPOs, Tesla, PAG Asia Capital, Momo, CEFC China Energy, China M&A News, Fuyao Glass Industry Group, Eldridge Industries, Oriental Time Media, Hubei SanFeng Intelligent Conveying, Shanghai Sinylon, Jilin Jien Nickel, PingAn, Bigo Live, Stada, Advent, Permira, Huarong Asset Management, Fenqile, US IPO, Leshi Internet, China Bridge Capital, Wanfeng, Fuyoukache, CCEF, Co-High Investment, Sidney Kimmel Entertainment, Easemob, Yin Tai Jai He Capital, Kandi, IM Global, Enlight Pictures, China Gezhouba Group, Yingli Solar, Ceo Dewang, Yirendai, CBRC, China Hollywood Investment