China DealBook
A Newsletter on Deal Making in China

By: ChinaDesk | March 16, 2017

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

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Source: FT

Deal News

Dalian Wanda is King Kong in Hollywood Mr Wang has so far adopted the same Kong-like bluntness in entertainment as he has in Chinese property, building a swath of Wanda Plaza shopping and leisure centres across the country. If he carries on thumping, he may well get his way eventually. Sony Pictures, with which Wanda struck a financing deal in September, is going through a difficult phase — one of several since Sony made the first Asian advance on Hollywood in 1989 by buying Columbia Pictures.

AC Milan Bidder Said to Lose Backing of State-Owned Chinese Firm
The little-known Chinese group attempting to buy Silvio Berlusconi’s AC Milan soccer team has lost the backing of its state-owned partner, leaving businessman Li Yonghong to find a way to complete the deal on his own, people familiar with the matter said. 


Haixia Capital Management Co. will no longer be an investor in Sino-Europe Sports Investment Management Changxing Co. after regulators at home stepped up criticism of sports deals. Sino-Europe Sports and Fininvest are now in discussions about a new deal for Associazione Calcio Milan S.p.A., which could be signed as soon as this week. The new agreement may involve finding alternative funding.

 

Chow Tai Fook Enterprises snaps up Alinta Energy in $4bn deal

Chow Tai Fook Enterprises has bought Alinta Energy for around $4 billion from TPG Capital after a plan to float the business drew a lukewarm response from prospective equity investors.

 

Chow Tai Fook Enterprises is controlled by the wealthy Hong Kong jewellery family of Cheng Yu Tung and the deal comes as Alinta was upgrading its earnings forecasts amid a period of strong energy demand across the east coast. The group is believed to have been circling the business since early February.

 

Ant Financial Stays Course on MoneyGram Purchase after Surprise Counterbid
Ant Financial Services Group vowed on Wednesday to forge ahead with its plans to buy MoneyGram International Inc., hours after the U.S. money-transfer specialist received a higher unsolicited bid.


A $1 billion offer for MoneyGram from Euronet Worldwide improves on the deal it reached earlier this year with the payments affiliate of Jack Ma’s e-commerce colossus Alibaba.

 

Chinese Genomics Giant BGI Makes Another Try For Shenzhen IPO
Shenzhen-based Chinese gene sequencing giant BGI Genomics Co., Ltd is making another try for a listing on the ChiNext board of the Shenzhen Stock Exchange, seeking to raise US$250 million by issuing 40 million new shares, after its previous application was rejected last November.

 

Google, Facebook Build a Data Highway to Asia—Financed by a Chinese Developer
A real-estate magnate is financing Google’s and Facebook Inc.’s new trans-Pacific internet cable, the first such project that will be majority-owned by a single Chinese company. Wei Junkang, 56, is the main financier of the cable between Los Angeles and Hong Kong, a reflection of growing interest from China’s investors in high-tech sector.

 

China, Saudis Said to Discuss CIC, CNPC Investment in Aramco IPO
China’s in talks with Saudi Arabia for its sovereign wealth fund and largest energy company to invest in the initial public offering of the Middle East nation’s state oil producer, according to people with knowledge of the matter. The nation’s $814 billion China Investment Corp. would be the principle investor in the planned flotation by Saudi Arabian Oil Co. China National Petroleum Corp. may also invest in the IPO.

 

China's Anbang denies report of Kushners property investment
China's Anbang Insurance Group said it is not investing in a Manhattan office tower owned by the family of Jared Kushner, President Donald Trump's son-in-law and senior adviser. A company part-owned by Donald Trump's son-in-law and now senior White House adviser, Jared Kushner, was reportedly negotiating a deal with a Chinese company to redevelop 666 Fifth Avenue in New York City.

 

Fosun's Property Arm Suspends Investment in Europe Amid Political Concerns
Alex Gong, president of Fosun Property Holdings, said the company will suspend investment in Europe's property market due to political instability in the region, according to The Wall Street Journal. The elections in the Netherlands, France and Germany and the U.K.'s withdrawal from the European Union are among the reasons that propelled the company to make the decision, Gong said.

 

GE Sets up JV in China for Gas Turbine Production
General Electric's China branch has partnered with Harbin Electric Company Ltd. for a joint venture in northern Hebei province, eaching owning 50% of the shares. The JV aims to tap Beijing’s ambitious plans to build up the nation’s wind-energy sector. The venture will manufacture GE-designed wind turbines, with Harbin Electric holding a 51% stake.

 

General Electric (GE) also signed a series of agreements with Chinese companies to boost bilateral cooperation and enhance global competitiveness. In the healthcare sector, GE will deliver a bio-pharmaceutical plant model to China's BeiGene to produce medicine. GE also signed a deal with China Southern Airlines worth $3.48 billion to provide aircraft engine maintenance, repair and overhaul services to the airline company. Driven by the Belt and Road Initiative, GE will work with Chinese partners to build three power plants in Pakistan to improve local energy infrastructure.

 

Zongshen eyes stakes in seaplane operators
Zongshen Group, a manufacturer of generators and engines, plans to purchase a stake in the biggest seaplane airline in the Maldives this year, in an expansion aimed at becoming the world's No 1 operator of the aircraft, Chairman Zuo Zongshen said.

 

Alibaba invests in WayRay, a maker of augmented-reality dashboards for smart cars
After launching its first car last year, Alibaba is digging deeper into the automobile industry. The Chinese Internet and e-commerce behemoth is the lead investor in smart car tech developer WayRay’s $18 million Series B round, the startup announced.

 

Shenzhen Capital Co-leads $29M Round In Chinese Robotics Firm Makeblock
Evolution Media China, an investment firm founded by U.S.-based Evolution Media Partners, and Chinese investment firm Shenzhen Capital Group Co., Ltd.

 

Tencent, Baidu Lead $86M Round In Chinese Electric Vehicle Maker NIO
Tencent Holdings Ltd. and Baidu Inc. have led a RMB600 million (US$86 million) funding round in Shanghai-based electric car maker NIO, formerly known as NextEV, according to Chinese media reports citing insiders. IDG Capital, American investment firm TPG, Hillhouse Capital, Lenovo Group Ltd., Singapore-based GIC Private Ltd., and a number of investors also participated in the round, which values the start-up at RMB20 billion (US$2.8 billion) post-money.

 

Fosun Kinzon, IDG Lead Financing In China Mobile Marketing Firm ZMT Zhongmeng
Fosun Kinzon Capital and IDG Capital have led a series B round worth hundreds of millions RMB in ZMT Zhongmeng, a Beijing-based mobile marketing solutions provider. Beijing-based Jingsheng Technology Co., Ltd. also participated in the round, according to Chinese state media reports.

 

Top China Deal Maker Takes Aim at Buyouts With New Fund
One of China’s top deal makers is setting up a new private-equity firm, Nexus Point Partners, that is focused on buyouts, according to people familiar with the situation. Kuo-Chuan Kung is setting up Nexus Point in Hong Kong, after leaving another firm he co-founded, MBK Partners LP—which is now one of Asia’s biggest homegrown private-equity firms, with more than $10 billion invested across the region.

 

China Reform To Jointly Set Up $21B State-Owned Enterprise Reform Fund

Guangzhou Industrial Investment Fund Management Company, China Reform Holdings Co., Ltd and Shanghai Pudong Development Bank Co. Ltd. have jointly established a RMB150 billion (US$21 billion) investment fund geared to invest and support reforms of state-owned enterprises, according to an announcement. The first phase of the vehicle, named China Reform SOE Operating Investment Fund, will obtain capital allocations of RMB50 billion (US$7 billion) from the three state-owned entities.


Chinese group launches fund in Australia, eyes infrastructure
Chinese group, the Global CEO Fortune Club, on Thursday launched its first overseas fund with an aim to invest in Australian infrastructure projects.

 

China’s Capital Controls Hit European M&A
Chinese acquisitions of European companies have fallen 90% so far this year and high-profile takeovers are in limbo because of tighter capital controls introduced by Beijing, security concerns and political uncertainty.

 

China, Saudi Arabia sign US$65 billion in deals as King Salman starts Beijing visit
Saudi Arabia’s King Salman oversaw the signing of deals worth potentially US$65 billion as he began a visit to Beijing on Thursday, as the world’s largest oil producer looks to cement ties with the world’s second-largest economy.

 

China makes first-ever U.S. Strategic Petroleum Reserves purchase
PetroChina has bought crude oil from the U.S. Strategic Petroleum Reserve, the first such purchase by a Chinese company and a move that highlights growing Chinese interest in U.S. crude. PTR bought 550K barrels from the SPR in the Department of Energy's latest sale for a total of $28.8M.

 

Lincoln to Build Cars in China, in Pursuit of Cadillac
Lincoln Motor Co. will start building cars in China by late 2019, as it looks to better compete with German and U.S. rivals to gain a larger share of fast-rising demand for luxury cars in the world’s biggest auto market. In doing so, Lincoln hopes to catch up with General Motors Co.

 

HNA Buys Fourth Site Near Old Hong Kong Airport for Mega-Project
Chinese conglomerate HNA Group Co. beat 14 bidders to buy a fourth plot of land near Hong Kong’s former airportHNA-controlled Hong Kong International Construction Investment Management Group Co. unit Milway bid HK$7.44 billion ($958 million) for the plot. The four sites will be combined into a single residential project totaling almost 400,000 square feet.

 

Companies


Vanke board re-election likely to be delayed until at least May
The planned re-election of China Vanke’s board of directors this month is likely to be delayed until at least May amid an unsettled fight among shareholders for control of the company.

 

Manulife Becomes the First to Receive Investment Company WFOE License
Manulife Financial Corporation announced Wednesday that the company has been granted an Investment Company Wholly Foreign-Owned Enterprise (WFOE) license in China.

 

Youku Toudou Employees to Join Alibaba Pictures
Youku Toudou, the major video streaming website owned by Alibaba Group Holding Ltd., will be pooling resources with the film production arm of its parent company, Alibaba Pictures. Youku employees will be joining Alibaba Pictures’ team.

 

The cooperation will give Alibaba Pictures priority rights to invest and develop titles, as well as the rights to existing online film franchises owned by Youku Tudou. The two will jointly establish a talent agency and work together in film distribution.

 

Meitu Makes Investors Look Good
You'll never have trouble selling something that makes people feel good. Investors in China agree, piling into shares of the beauty-app maker Meitu Inc.

 

Alibaba, Tencent to Get Most of China Fintech Mkt.
Financial technology, or fintech​, is taking off in a huge way, particularly in China, where Alibaba Group Holding Ltd. and Tencent are poised to control half if not more of the fintech market.

 

China Robotics Unicorn Ubtech Wants Life-Size Robot Friend In Every Home
James Zhou, founder of China's biggest robot maker Ubtech Robotics, was fascinated by the Transformers show as a young boy in Shanghai during the 1980s. A few decades later, he's turned his childhood passion into Ubtech, a US$5 billion technology powerhouse based in Shenzhen.

 

CVC to open India office
CVC Capital Partners will open its first India office as it aims to grow its business in the country.

 

Chinese-Led Venture Fund Seeks To Invest Using Algorithm-Based Evaluation
Follow[the]Seed, a next generation data-driven venture fund with footprints in Tel-Aviv, Beijing, Silicon Valley and Sydney, will offer US$50 million in funding to back under-resourced start-ups seeking to raise between US$0.5 and US$2 million.

 

Hong Kong Regulator Reprimands, Fines Zhongtai International Securities
Hong Kong securities regulators have fined Zhongtai International Securities Ltd. HK$2.6 million ($335,000) for failing to comply with anti-money-laundering regulations when handing third-party fund deposits.

 

Other Updates

 

China's Central Bank Raises Borrowing Costs in Step With Fed
China’s central bank raised borrowing costs as a stable economy and factory reflation give it scope to follow the Federal Reserve in tightening policy.


China’s central bank's announced 10 basis point rate will help to stabilize the RMB in the wake of the U.S. Federal Reserve’s overnight rate hike and also help to address the property market bubble, says Mizuho Securities Asia Ltd. in a research report released today.

 

BlackRock Lists Key Takeaways From China's National People's Congress
The annual meeting of the National People’s Congress (NPC) in Beijing was completed today, sending a strong message to shift focus from boosting economic growth to reining in financial risks, with the help of structural reforms rather than blunt policy tightening.

 

PBOC Drains 20 Billion Yuan From Banking System Thursday
China’s central bank auctioned 20 billion yuan of 7-day reverse-repurchase agreements (repos) at a rate of 2.45%, 20 billion yuan of 14-day repos at a rate of 2.60%, and 40 billion yuan of 28-day repos at a rate of 2.75% in the open market Thursday.

 

China Considers Connecting Mainland, Hong Kong Bond Markets
In a bid to further open up its vast bond market to the world, China is looking to launch a bond connect program with Hong Kong.

 

33.8 Billion Yuan in Bonds Delayed or Canceled in March
Chinese firms have delayed or canceled 33.8 billion yuan in bonds in the first half of March, compared to 12.4 billion yuan during the same period last year. Twelve billion yuan in bonds were delayed or cancelled in all of February. All the firms that delayed or canceled bonds attributed their reasons to market fluctuations.