China DealBook
A Newsletter on Deal Making in China

By: ChinaDesk | May 14, 2017

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


Deal News

China's $246 Billion Foreign Buying Spree Is Unraveling
After stunning the world with a record $246 billion of announced outbound takeovers in 2016, Chinese dealmakers are now struggling to cope with tighter capital controls and increasingly wary counterparties. Cross-border purchases plunged 67 percent during the first four months of this year, the biggest drop for a comparable period since the depths of the global financial crisis in 2009.

Andre Loesekrug-Pietri, founder and managing partner of A Capital, a private equity fund specializing in Chinese outbound investments, doubts if 2017 could match the $170 billion worth of Chinese investments made overseas last year. "I feel we are entering an ice age with difficult years ahead."

2.6-bln-USD venture capital fund to support Chinese startups
China has set up a national venture capital fund for guiding the development of startup companies in new sectors of strategic importance. The fund was set up by the Ministry of Finance, the National Development and Reform Commission and the State Development & Investment Corporation (SDIC), among others. SDIC Chairman Wang Huisheng said that the fund had raised a total of 17.8 billion yuan (about 2.6 billion US dollars), with 80 percent to be invested in startups in initial and early stages and 20 percent in mature enterprises that are not yet listed.

ChemChina gets around 82 percent of Syngenta in $43 billion deal
ChemChina has won around 82 percent support from Syngenta shareholders for its $43 billion takeover of the Swiss pesticides and seeds group, China's biggest foreign acquisition to date, the two companies said on Wednesday.

Chinese Car Maker Geely To Acquire 30% Of Danish Financial Firm Saxo Bank
Saxo Bank Group, a Danish multi-asset trading and financial-technology firm, has received an offer from Geely International Hong Kong, a subsidiary of Chinese car maker Zhejiang Geely Holding Group Co., to become a major shareholder in Saxo, enabling the bank to capitalize on global growth opportunities, especially in China. Geely is expected to own 30% of Saxo on the deal's completion. Financial terms of the transaction, which is expected to be finalized by the fourth quarter of 2017, have not been disclosed.

YTO Express Eyes Global Expansion With Hong Kong Logistics Purchase
YTO Express will buy a majority of Hong Kong’s On Time Logistics for HK$1.04 billion ($134 million), as China’s young parcel delivery firms seek to move beyond their home market to challenge global giants like United Parcel Service and DHL Express.

Black Sesame Opens Online Gates With $100 Million Purchase
Food products maker Nanfang Black Sesame Group Co. Ltd. said it will pay about 700 million yuan ($101 million) for online sales channel specialist LDD as it seeks to bolster its sagging bottom line by boosting its online presence.

China’s Yili lines up bid for Danone’s US yoghurt maker Stonyfield
China’s largest dairy company Yili Group said on Thursday it will bid “about $850m” for Stonyfield, the US organic yoghurt company owned by France’s Danone. The bid for all of Stonyfield’s shares is in a “preparatory stage”, Yili said in a statement to the Shanghai stock exchange.

China's Zhonghong Buys 21% Of SeaWorld To Bring It To China
A unit of Chinese conglomerate Zhonghong Zhuoye Group Co., Ltd. has agreed to acquire an approximately 21% stake in New York Stock Exchange-listed SeaWorld Entertainment, Inc. with an eye to bring the theme park concept into China.

Xinjiang Goldwind to Buy Australia’s Largest Windfarm
Chinese wind turbine generator maker Xinjiang Goldwind Science & Technology Co. Ltd. will buy 149-turbine wind farm in Australia for $81.5 million, the country’s largest such project. Goldwind said it will buy Stockyard Hill Wind Farm Pty. Ltd. from a unit of Origin Energy Ltd.

China's Alipay Grabs Slice of U.S. Market With First Data Deal
China’s mobile-payments king wants a piece of the world’s biggest consumer market. Alipay, owned by Jack Ma’s Ant Financial, reached a deal that will let its users shop at 4 million U.S. merchants served by payments processor First Data Corp., the companies said Monday in a joint statement.

Chinese regulator greenlights 10 IPOs
The China Securities Regulatory Commission (CSRC) has approved the IPO applications of 10 companies. The companies will raise no more than 6.2 billion yuan ($899 million), a statement said late Friday. Five companies will be listed on Shanghai Stock Exchange, two on the Shenzhen stock market's Small and Medium-sized Enterprise Board and three on the ChiNext, China's NASDAQ-style board.

Xiaomi Looks to Refinance $1 Billion Loan
Chinese smartphone maker Xiaomi Inc. was discussing with several banks including Deutsche Bank AG, Wing Lung Bank, and Morgan Stanley to refinance a three-year, $1 billion loan it took out in 2014.

SoftBank confirms it’s putting $5BN into Didi Chuxing, the ‘Uber of China’
Japanese telco giant SoftBank has confirmed the size of its investment into Didi Chuxing, aka the Uber of China, and the figure is $5 billion.

YSK1860 Acquires Ownership Interest in Cleantech Solutions International
YSK1860, an investment holding company with investments in different countries covering a wide range of sectors from traditional construction, real estate, trading to environmental and the Internet, acquired all of the shares of Cleantech Solutions International, Inc. previously held by Cleantech Solutions' Chairman and CEO, Mr. Jinhua Wu, and his affiliates.

Fintech Firm Backed by Chinese Movie Stars Said to Plan U.S. IPO
QuantGroup, a financial technology company backed by Chinese movie stars, is planning a U.S. initial public offering that could raise about $200 million, according to people with knowledge of the matter.

Tencent doubles down on game studio Pocket Gems with $90M investment
Chinese internet Tencent has continued its recent investment spree after it backed U.S.-based game studio Pocket Gems to the tune of $90 million. Tencent invested in Pocket Gems back in 2015, when it put in a reported $60 million for a 20 percent stake.


Tencent, Baidu Join $580M Round In Chinese Online Car Financing Platform Yixin
Yixin Capital, an online automobile financing platform backed by Tencent Holdings Ltd, Baidu Inc., and BitAuto Holdings Ltd, has raised a RMB4 billion (US$580 million) new funding round.

China serviced apartment operator gets $43m
Anxin Apartment, a China-based serviced apartment operator, has raised RMB300 million ($43 million) in a Series B round spread across two tranches.

Hillhouse Capital Joins $550M Round In Singapore Online Game Developer Sea
Sea Ltd., a Singaporean online game developer formerly known as Garena Interactive Holding Ltd, has raised a US$550 million funding round from investors, including Chinese investment firm Hillhouse Capital. Other investors in the round include Taiwan-based Cathay Financial Holding Co., Ltd.

China Creation leads $16m for credit evaluation specialist
China Creation Ventures, a VC firm recently launched by Wei Zhou, formerly a managing partner at KPCB China, has led a Series A round of funding worth RMB110 million ($16 million) for credit evaluation business IceKredit.

Maison leads round for Sino-Indonesia e-commerce site
China-focused GP Maison Capital has led a RMB150 million ($22 million) Series B round of funding for Wook, a cross-border B2B e-commerce platform that focuses on China and Indonesia markets. Another domestic PE firm, Founder Danen Ventures, also took part in the round.

Qiming leads $17m round for China data storage software developer
Qiming Venture Partners has led a RMB120 million ($17 million) Series B round for XSKY Beijing Data Technology Corporation, a China-based data storage software services provider. Northern Light Venture Capital (NLVC) and Redpoint Ventures China also participated in the round.

Pagoda leads Series A for China smart sensing player
China-focused VC firm Pagoda Investment has led a RMB110 million ($16 million) Series A round of funding for Hesai, a Shanghai-based company that develops smart sensing technology solutions.

CMB PE unit leads round for Shanghai pop group developer
Shanghai Star48 Culture & Media, a media agency that developed Chinese female pop group SNH48, has raised a Series C round of funding led by CMB International Capital, a private equity unit of China Merchants Bank. The round is said to be worth hundreds of millions in renminbi.

BOCI leads Series C for Chinese online gold trading platform
An investment unit of Bank of China International (BOCI) has led a RMB200 million ($29 million) Series C round for G-banker, a Chinese online gold trading platform that has several venture capital backers. BOCI participated via Bohai Zhongsheng Fund, which was established last year.

Qiming Leads $17M Round In Chinese Data Storage Firm XSky
Chinese venture capital firm Qiming Venture Partners has led a RMB120 million (US$17 million) series A round in XSky Beijing Data Technology Co Ltd, a company providing software-defined-infrastructure products and services.

Tencent leads $34m round for VC-backed cloud player
Tencent Holding has led a RMB235 million ($34 million) funding round for Transwarp Technology, a Chinese big data technology developer backed by a string of venture capital investors.

KKR completes exit from China's Rundong Auto with $51m sale
KKR has fully exited its remaining 11.8% stake in car dealership China Rundong Auto Group for HK$395 million ($50.7 million), ending a seven-year association that included an IPO in Hong Kong in 2014.

China flexible display developer Royole raises $58m
Royole Corporation, a China-based flexible display technology developer, has received RMB400 million ($58 million) in Series D funding from a domestic GP Beijing Zhongtai Chuanghui Equity Investment Fund. Royole was founded in 2012 and has offices in the US, Hong Kong, and Shenzhen.

CDIB Capital backs World Gym Taiwan
CDIB Capital, the PE arm of Taiwan's China Development Financial, has acquired a minority stake in World Gym Taiwan, the largest fitness center chain in Taiwan, alongside several co-investors. Financial terms were not disclosed.

Hong Kong's AID Partners buys Israel's GeneSort
Hong Kong-listed private equity firm AID Partners has acquired Israel-based molecular diagnostics company GeneSort for $23 million.

Tencent Leads $54M Round In US Mobile Music App Developer Smule
Chinese Internet giant Tencent Holdings Ltd. has led a US$54 million funding round in Smule, a San Fransisco-based mobile music app developer.

China Car Parts Giant Boosts Energy Credentials With Commodities Joint Venture
Top car-parts maker Wanxiang Group said it will form a joint venture with U.S. energy commodities specialist Hartree Partners to trade and market commodities within China and also on a cross-border basis.

Ant Financial’s Credit Scoring Ambitions Crawl Ahead With Two New Deals
A major state-run wireless carrier and a private shared-economy company have announced new tie-ups with Ant Financial’s personal credit scoring unit, spotlighting a growing race to see who can be first to cash in on an emerging financial services business with huge potential.

Wanda in Talks to Develop Malaysia’s Biggest Real Estate Project
China’s Dalian Wanda Group is in talk with Malaysia government to lead the development of the country’s biggest real estate project, the Bandar Malaysia.

Aircraft Builder to Set Up Fund for Chinese-Built Jetliners
State-owned aircraft builder Commercial Aircraft Corp. plans to set up a capital investment firm to raise more than 10 billion yuan to support the Chinese-built jetliners.

Work Begins on Boeing’s First Overseas Factory in Zhejiang
Construction of Boeing’s first overseas facility as part of its 737 completion and delivery center started Thursday in the east Chinese port city of Zhoushan.

Chinese Firm Wins Gas Pipeline Project in Nigeria
China National Petroleum Corporation Engineering Co. Ltd. has won a bid for a natural gas pipeline project in Nigeria, the company said in a filing to Shanghai bourse late Monday.

China 2014-2016 Investment in Belt and Road Countries Tops $50 Billion: President Xi
China invested more than $50 billion in countries along the One Belt One Road initiative between 2014 and 2016, after the project was first unveiled in 2013, Chinese President Xi Jinping said on Sunday.

SOEs Lead Infrastructure Push in 1,700 ‘Belt and Road’ Projects
With a large portion of initial Belt and Road projects focusing on infrastructure projects such as highways, railways, and ports, state-owned enterprises (SOEs) have been playing a leading role in the first phase of the program’s overseas expansion.

Bank of China Supporting 460 Projects Along Belt and Road Initiative
The Bank of China has given its supports to 460 projects along the Belt and Road Initiative, making loans totaling $68 billion, Xu Luode, deputy director of the Bank of China, said in a news conference.  

ICBC Gives Financial Support to 212 Projects Along Belt and Road Initiative
The Industrial and Commercial Bank of China, the largest commercial bank in China, said it has underwritten loans totaling $67.4 billion to support 212 projects along the Belt and Road Initiative, the deputy head of ICBC said in a news conference Thursday.  

Export-Import Bank of China Gives Financial Support to 1,200-Plus Projects Along Belt and Road Initiative  
The Export-Import Bank of China has signed contracts worth more than 700 billion yuan ($101 billion) in support of more than 1,200 projects along the Belt and Road Initiative, Sun Ping, deputy director of the Chinese policy bank, said in a news conference.

American Cities Where China Is Investing the Most
Chinese investment in the United States hit an all-time high in 2016. That year, Chinese companies invested $46 billion in the country, more than triple the $15 billion investment in 2015. Just 12 major metropolitan areas attracted nearly half of all Chinese investment in the country since 2000.


China's tech money heads for Israel as U.S. welcome wanes
Struggling to seal deals in the United States as regulatory scrutiny tightens, Chinese companies looking to invest in promising technology are finding a warmer welcome for their cash in Israel.

Germany welcomes Chinese investment in financial firms
China is welcome to invest in German financial firms, Germany's top market watchdog said after Chinese conglomerate HNA Group raised its stake in Deutsche Bank.

China Private Equity Investment Surges in April
China witnessed a sharp increase of private equity investment in April, boosted by big deals in the medical and IT sectors, according to a new industrial report released on Monday.




Didi Launches English Ride-Hailing Services In China
China's largest ride sharing company, Didi Chuxing, today announced the beta launch of a bilingual version of its ride hailing app, enabling international users in Beijing, Shanghai and Guangzhou to access the services via an English-language interface.

SOE Reforms Big Challenge for BAIC
Chinese carmaker Beijing Auto has confirmed that the government is planning to scrap the current 50/50 joint venture requirement with foreign carmakers.

Alipay, China’s top mobile payment service, expands to the U.S.
China’s dominant mobile payment service is making its move in the U.S.. Ant Financial, the Alibaba spin-off that operates Alipay, has inked a deal with payment processor firm First Data that will allow its service to be used at point-of-sale with more than four million retail partners in the U.S. Finally Finds Profit in E-Commerce Inc. reported its first-ever quarterly profit on Monday as the e-commerce retailer’s promotional costs eased while revenue continued to surge after years of business-building in its pursuit of national leader Alibaba Group Holding Ltd.

BAT Might Become JAT As JD.Com Value Catches Up With Baidu
BAT, a term used to describing the three dominant Chinese Internet giants Baidu, Alibaba and Tencent, could soon become JAT, as the value of search engine Baidu Inc. looks likely to be overtaken by Inc.

China’s First Foreign-Owned Fund to Focus on Bonds
Fidelity International became the first foreign firm to launch a private fund in China on Friday, breaking new ground in a tightly controlled financial products and services market that previously limited foreign ownership of such funds.

WeWork Opens Three More Spaces in China
American shared-workspace provider WeWork says it opened two new offices in Shanghai and another one in Beijing. It has been running nine branches in China after it entered the market last year, with six in Shanghai and three in Beijing.

Tencent Rolls Out ‘TPG’ Image Compression Method
Chinese tech giant Tencent Holdings Ltd. has developed a new digital compression format dubbed TPG, short for “Tiny Portable Graphics”, which it hopes will become an adopted standard for file compression for stickers used in Tencent’s instant messaging software platforms WeChat and QQ.


Two Chinese Named in Forbes List of Six Top AI Thinkers
Andrew Ng, former chief data scientist at Chinese internet giant Baidu and Fei-Fei Li, chief of artificial intelligence (AI) and machine learning at Google Cloud and associate professor at Stanford University, have been named two of the six most influential people in the field of digital technology.

China’s bike rental startups are learning a lot about how people spend their free time
Superficially the data shows the impact the bikes are having on leisure time. The lifestyle advertising seems to have made headway as touristy areas thronged with cyclists. By revealing the data behind the trend, Mofang demonstrates how applying AI to massive amounts of data is going to create a valuable resource for Mobike as it builds a more detailed picture of its users’ lives.

Russia Lifts Ban on Tencent’s WeChat Messaging App

The Russian Federal Service for Supervision of Communications, Information Technology, and Mass Media (Roskomnadzor) said WeChat has provided information necessary for the registration of organizers of information distribution on the internet.

China's SF Express Opens Centers In Vietnam, Thailand As Firm Expand In Asia
SF Express, a subsidiary of Shenzhen-listed SF Holdings that has a market capitalization of US$29 billion, has opened service centers in Vietnam and Thailand, as the express delivery firm continues to expand in Asia.

China General Nuclear Power Expands to More Than 20 Countries
China General Nuclear Power Group, the country's largest nuclear power plant builder, has expanded its nuclear and clean energy business to more than 20 countries, including the UK, Belgium, Ireland and Malaysia.

Bank of China Macau Branch Requests Huishan Repay $51 million
China Huishan Dairy Holdings Co. Ltd. has received a letter from Bank of China’s Macau Branch, which asked the company to repay its $50 million loan with $937,363 interest before May 16, 2017.

Yidao Yongche Latest Company to be Granted Car-Hailing License
Yidao Yongche, China’s second largest provider of Uber-like car-hailing services, has received a national car-hailing operations license.


Other Updates


US and China sign trade agreement
The US and China have reached a 10-point trade deal that opens the Chinese market to US credit rating agencies and credit card companies. Under the deal, China will also lift its ban on US beef imports and accept US shipments of liquefied natural gas. What is Donald Trump’s new trade deal with China? 

China's Deleveraging Bill Tops $500 Billion
How much pain can Chinese leaders stomach? It’s becoming a key question for investors as the government’s stepped up campaign to rein in financial leverage ripples through markets.

As China's banks swap corporates for retail borrowers, risks rise
China's lenders are swapping struggling corporates for more promising retail borrowers - restructuring branches, teams and even overhauling bankers' commissions in an unprecedented push that is fuelling a record jump in home loans.

China Money Network Launches Its China Unicorn Ranking With 102 Firms Worth $435B

We live in the age of unicorns. Since the term was coined in 2013 by venture capitalist Aileen Lee to describe start-ups valued at US$1 billion or more, unicorns have multiplied with incredible speed.

Tycoons From China Plant Money Management Flags on Wall Street
When a new hedge fund opened in Mountainside, New Jersey, a leafy suburb that still holds an annual little-league parade, few would have guessed where much of its funding came from: Chinese billionaire Cai Kui.

Shanghai leader says city can't advance without reform and innovation
China's commercial capital of Shanghai has reached the point where it needs to boost reform and innovation or risk stunting economic development, its top official warned on Monday.

Internet-Based Economy Boosts China’s GDP, Creates Jobs
The internet-enabled digital economy accounted for 30.6% of China’s GDP in 2016 and created 2.8 million new jobs, more than one-fifth of all newly-added positions, an industry report said.

Banking Regulator Launches Emergency Risk Assessments to Crack Down on Shadow Banking: Reuters
China’s banking regulator launched emergency risk assessments of lenders’ new business practices this week in a bid to crack down on shadow banking, Reuters reported on Friday, citing sources with knowledge of the matter.

China’s New Credit Falls in April
China's total social financing (TSF), a broad measure of credit and liquidity in the economy, dropped to 1.39 trillion yuan ($ 200 billion) in April from 2.12 trillion yuan in March, according to data released on Friday by the People’s Bank of China, the central bank.

Hebei Issues 18.8 Billion Yuan in Government Bonds on SSE
The government of Hebei province has issued 18.8 billion yuan in government bonds on the Shanghai Stock Exchange (SSE), the state-run Hebei Daily reported Thursday.