China DealBook
A Newsletter on Deal Making in China

By: ChinaDesk | May 07, 2017

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

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Deal News


ChemChina clinches landmark $43 billion takeover of Syngenta
ChemChina has won more than enough support from Syngenta shareholders to clinch its $43 billion takeover of the Swiss pesticides and seeds group, the two companies said on Friday.

The trend toward market consolidation has triggered fears among farmers that the pipeline for new herbicides and pesticides might slow. Regulators have required some divestments as a condition for approving the Syngenta deal. The other deals in the sector are a $130 billion proposed merger of Dow Chemical and DuPont, and Bayer's plan to merge with Monsanto.


Meanwhile China has conditionally approved the proposed merger between Dow Chemical Co. and Dupont, the country’s Commerce Ministry said on Tuesday.

Mining Equipment Maker Plows Into Car Parts With German Acquisition
Zhengzhou Coal Mining Machinery Group Co. Ltd. said it will buy a major unit from leading global car parts maker Robert Bosch GmbH in an aim to diversify as China weans itself from highly polluting coal-generated power.

 

China Renaissance Capital Investment (CRCI) and Chinese industrial group Zhengzhou Coal Mining Machinery (ZMJ) have agreed to buy a starter and generator (SG) manufacturing business from German engineering multinational Robert Bosch for EUR545 ($595 million).

 

China's Ant set to ink $3.5 billion loan to help fund MoneyGram bid
China's Ant Financial, an affiliate of online shopping giant Alibaba Group, is close to signing a $3.5 billion loan a part of which will help fund its purchase of U.S. money transfer company MoneyGram International.

 

Fourteen banks, including Australia and New Zealand Banking Group, Citigroup, Credit Suisse, Goldman Sachs, HSBC, Morgan Stanley and JPMorgan, have committed to the loan. The three-year syndicated term loan will replace a bridge facility that backed Ant Financial's bid for MoneyGram.

 

LT Smart Energy Purchases Guangshuo New Energy for HK$130 million
LongiTech Smart Energy Holding Limited (LT Smart Energy), a leading operator of smart energy cloud platforms in China, announced that the Company has completed the acquisition of the entire equity interests in Gao Bei Dian City Guangshuo New Energy Co., Ltd at an aggregated consideration of HK$130 million.

 

Food Giant COFCO Looks to Shed Money-Losing Assets

 COFCO has announced the sale of three subsidiaries over the past two weeks on the China Beijing Equity Exchange, including instant-noodle brand Wugudaochang, instant-food producer COFCO Jiangxi Natural Cereal Foods Co. Ltd. and grain and oil maker COFCO Tianhai Grain and Oil Industry Co. Ltd.

 

Hillhouse, CDH propose $6.8b take-private of Belle International
CDH Investments has teamed up with Hillhouse Capital on a proposed HK$53.1 billion ($6.8 billion) privatization of Belle International, a Chinese shoe retailer that it first backed in 2005 and took public two years later.

 

Muse Holdings-B, a business that includes private-equity investor CDH Group and Belle's management, said that it would pay 6.3 Hong Kong dollars in cash per share, or $6.3 billion HKD ($5.82 billion) to take the company private.

 

China Oceanwide seeks more time for U.S. approval of Genworth deal
China Oceanwide Holdings Group Co said on Friday it had refiled its application for U.S. approval of its $2.7 billion acquisition of life insurance company Genworth Financial Inc, in a bid to add more time to the regulatory review.

 

China's HNA Boosts Stake In Deutsche Bank To Become Largest Shareholder
China's acquisitive conglomerate HNA Group has become the largest shareholder of Deutsche Bank AG, after increasing its stake in the German banking giant to almost 10%, from 4.8% a month ago. HNA Group's stake has now overtaken Qatar's royal family and BlackRock Inc. to top the shareholders list.

 

Alibaba Nets $1 Billion Via Momo Share Sale In Ultra-Lucrative Exit
Chinese e-commerce giant Alibaba Group has netted at least US$1 billion in proceeds by selling most of its shares of location-based social networking mobile app firm Momo Inc. The divestment locks in a net gain of at least 50-times the e-commerce company's initial investment.

 

Alibaba invested around US$25 million in Momo in 2012 and 2013. Alibaba's stake, 20.7% during the NASDAQ IPO (2014), has since dropped to a level so low that it is no longer listed among Momo's principle shareholders.

 

Tencent Leads $1.2B Round In Indonesia Motorbike Ride Hauling Firm Go-Jek
Chinese tech giant Tencent Holdings Ltd. has led a US$1.2 billion financing round in Go-Jek, a motorbike on-demand ride-hauling operator in Indonesia.

 

China's JD.com Said in Talks to Invest in Indonesia's Tokopedia
JD.com Inc., Alibaba’s fiercest rival in Chinese e-commerce, is in talks to make a major investment in Indonesia’s PT Tokopedia to speed its expansion into Southeast Asia’s largest economy, people familiar with the matter said.

 

A successful deal with Tokopedia will take JD’s competition with Alibaba Group Holding Ltd. to Indonesia. It would be buying into a local ally ahead of a potential push into the region by Amazon.com Inc. China’s two biggest e-commerce players have both poured major sums into Southeast Asia, capped by Alibaba’s acquisition of a controlling stake in Lazada Group SA last year.

 

Hony ups stake in Australia’s Santos
Chinese private equity firm Hony Capital has invested A$184.3 million ($136.8 million) to increase its minority stake in Australia-listed oil and gas supplier Santos. A filing showed that Hony bought an additional 48 million shares, or a 2.3% stake, in Santos at A$3.84 apiece.

 

Romaco's PE owner sells majority of stake to China-based Truking
Chinese pharmaceutical equipment supplier Truking Technology Ltd. and other investors have agreed to acquire 75.1% of German pharmaceutical packaging and equipment maker Romaco Group for €150 million (US$164 million) from German PE firm Deutsche Beteiligungs AG (DBAG). DBAG acquired Romaco from Robbins & Myers, in 2011.

 

PAG set for $1.4b privatization of Yingde Gases
Chinese industrial gases supplier Yingde Gases is scheduled to be delisted in September after shareholders voted in favor of a buyout offer from PAG Asia Capital that values the company at approximately HK$11.3 billion ($1.45 billion).

 

Tencent Music Group Plans IPO At $10 Billion Valuation
Tencent Music Entertainment Group, a subsidiary of Chinese technology investment giant Tencent Holdings Ltd., has started selecting investment banks to pursue an initial public offering at an estimated valuation of as much as US$10 billion.

 

China's First Bike Rental Firm Hits Legal Bump on Ride to IPO
Youon Bike, a Jiangsu province-based bike sharing company, has called off its planned initial public offering in Shanghai after a lawsuit was filed accusing the company of violating intellectual properties rights.

Gu Tailai, founder of a company named Jiangsu SimLink Co. and a graduate of the University of Arizona, accused Youon of infringing upon his intellectual property relating to "no-pole bike renting systems and methods" in a lawsuit filed at a court in Nanjing.


Top Hot Pot Chain Tests Waters With Sister Company’s Listing
A sister company of top hot pot chain Sichuan Haidilao Catering Co. has gone public, heating the waters in a thriving Chinese restaurant sector as Haidilao itself reportedly is eyeing an initial public offering (IPO) that could be the largest ever for a local homegrown business.

 

Youdingyou (Beijing) Food Ltd., a restaurant operator that serves “maocai,” a stewlike dish originating from Sichuan province, listed two weeks ago on China’s New Third Board, an over-the-counter (OTC) market open only to wealthy investors.

 

Bona Film in Public-Listing Sequel Back Home
Bona Film Group Ltd., China’s first entertainment company to list on an overseas stock market, has started working toward an initial public offering on the mainland in hopes of finding better valuation at home.

 

Media Group Makes Landmark Private-School Purchase
A state media group has become the first publicly traded company in China to buy a first-through-12th-grade private school, with a goal of floating the independently funded school on the Hong Kong bourse.

 

Vanke’s Main Stakeholder Commits Shares as Collateral
Real estate developer Baoneng Group’s subsidiary Jushenghua has again pledged a portion of its stake in one the nation's largest developers China Vanke as loan collateral.

 

Vanke, which successfully rebuffed a Baoneng hostile takeover bid last year, said that Jushenghua had put up 91 million shares, or 0.82% of its stock, as part of a deal with Citic Trust on April 28.

 

China Merchants Securities to Establish 10 Billion Yuan Buyout Fund With Haier
China Merchants Securities and Haier Group Corp. would establish a 10 billion yuan buyout fund to make equity investments in household appliances, logistics, health, and other fields.

 

Hong Kong-led investment group to spend 1 billion yuan on medical facilities in Guangdong
An investment group led by former Hong Kong finance minister Antony Leung Kam-chung will pump at least 1 billion yuan (HK$1.13 billion) into a Shenzhen-based medical group as a pioneering move to participate in the Greater Bay Area plan, an integration scheme with cities in the Pearl River Delta.

 

Hong Kong's C C Land To Acquire London's Tallest Building For $1.48B
Hong Kong real estate firm C C Land Holdings Ltd., run by Chinese property tycoon Cheung Chung-kiu, has agreed to buy the Leadenhall Building, London's tallest building, for £1.14 billion (US$1.48 billion). The deal is the biggest sale of a single building in the U.K.

 

Chinese owner of Czech football club Slavia Prague confirms purchase of stadium completed
Mainland conglomerate CEFC China Energy, which owns one of Czech Republic’s top football clubs Slavia Prague, has confirmed that it has completed the purchase of the club’s stadium.

 

‘China’s greatest angel investor’ has made his first Southeast Asian investment
Silot, an ambitious fintech startup, has just launched in Southeast Asia and bagged a US$800,000 seed round from China’s ZhenFund to get started. It’s the sole investor in this round, and it’s ZhenFund’s first bet in Southeast Asia.

 

Meituan-Dianping Joins $23M Round In Netease's Pig Farm Weiyang
China's largest local on-demand service platform Meituan-Dianping has joined Sinovation Ventures and JD.com Inc. to lead a RMB160 million (US$23 million) series A round in Zhejiang province-based Weiyang, a pig farm business unit operated by Chinese Internet firm NetEase Inc.

 

CreditEase Fintech Investment Fund Joins $38M Round In US Start-Up Nav
CreditEase Fintech Investment Fund, a venture investing unit of Chinese financial technology firm CreditEase Group, has joined a US$38 million financing round in Nav, a U.S. fintech start-up helping small business owners get funding.

 

Jumei To Invest $43.5M In Chinese Power Bank Rental Firm Ankerbox
Jumei International Holdings Ltd., a Chinese beauty products e-commerce platform, has acquired an equity interest in Shenzhen Jiedian Technology Co., Ltd, a mobile device power bank rental start-up.

 

Cheetah Mobile’s Live.me streaming service raises $60M from Chinese investors
Cheetah Mobile, the Chinese firm that specializes in utility apps for smartphones, has enlisted the help of outside investors for its live-streaming service. Cheetah announced this week that its one-year-old Live.me service has pulled in $60 million from a range of China-based investors that include Matrix Partners China, Evolution Media China, Gobi Partners, IDG Capital and Welight Capital.


Broadline Capital-Backed China Rapid Finance Raises $60M In US IPO
China Rapid Finance Ltd., a Shanghai-based P2P (peer to peer) lending platform backed by Sino-U.S. private equity firm Broadline Capital, has priced an initial public offering to raise US$60 million via a listing on the New York Stock Exchange.

 

China’s ‘Uber for trucks’ Huochebang secures US$156 million in funding led by Baidu
An offshoot of Baidu, China’s dominant online search engine operator, has led a US$156 million funding round into the country’s leading online trucking platform, as it ramps up its effort to use artificial intelligence to reshape the booming transportation industry.

 

WuXi NextCODE Raises $75M Round Led By Temasek And Yunfeng Capital
WuXi NextCODE, a contract genomics organization and a unit under Wuxi AppTec, has closed a US$75 million series B financing co-led by Temasek Holdings and Yunfeng Capital. Other investors, including Amgen Ventures, a corporate venture capital fund established by Amgen Inc., and 3W Partners, a Greater China and cross-border focused private equity firm, also participated in the round.

 

China's BGI, Healthlink Invest In UK Genomics Software Firm Congenica
China's BGI Genomics, Chinese life science investor Healthlink Capital and global innovation fund Future Planet Capital have invested an undisclosed amount of capital in Congenica, a U.K. clinical genomics software developer for inherited diseases.

 

Jin Jiang International Joins $43M Round In Chinese AI Chip Maker Canaan
Hangzhou-based chip maker Canaan has raised RMB300 million (US$43 million) in a series A round from a number of investors including Chinese hotel operator Jin Jiang International Group Co., Ltd, Chinese investment firms Baopu Asset Management Co., Ltd and Tunlan Investment.

 

Tencent Leads $34M Round In Chinese Big Data Platform Transwarp
Tencent Holdings Ltd. has led a RMB235 million (US$34 million) series C round in Shanghai-based Transwarp Technology Co., Ltd, a Chinese big data software developer and service provider.

 

VC-backed China Rapid Finance raises $60m in US IPO
China Rapid Finance (CRF), a VC-backed peer-to-peer (P2P) lending platform, is trading up 32% on its IPO price following an offering on the New York Stock Exchange that raised $60 million. The stock closed on May 2 at $7.90, giving the entire company a market capitalization of around $448 million.

 

India’s MakeMyTrip to raise $330m from Ctrip, Naspers, others
India’s leading online travel firm MakeMyTrip today announced that it has signed share sale agreements to raise $330 million from China’s Ctrip and Naspers’ arm MIH Internet and others, to fund its expansion plans.

 

Ping An to Launch $1 Billion Fintech and Healthcare Fund
Ping An Insurance (Group) Company of China Ltd., the country’s second-largest insurer by market capitalization, is launching a $1 billion fund to invest in financial and healthcare technology worldwide. The fintech and healthcare interest is because Ping An runs Lufax, China’s biggest peer-to-peer lending platform, and has an interest in Good Doctor, a popular medical app.

 

China is going after overseas fintechs
China's largest tech companies have been focusing on expanding into overseas markets, which is causing some unease in the West, given their vast resources.

 

However, the threat from China may take some time to materialize. It might seem that Western startups would be eager to gain investors with resources as large as Ping An's and Ant Financial's, and that their entry into Western markets might threaten local giants. But, for now, this threat might be hypothetical. For one, Chinese investors have occasionally proven unreliable

 

Fidelity Beats Global Peers to Start First Private Fund in China
Fidelity International became the first global asset manager to start a private fund in China. The fund, which opened today, will mainly invest in Chinese onshore bonds and be sold to eligible Chinese institutions and rich individuals in private placements.

 

CMIG to create $15b One Belt One Road fund
China Minsheng Investment Group (CMIG), the largest privately-held investment group in China, has initiated a new fund that could raise up to $15 billion for investment in overseas projects under the government-backed "One Belt One Road" initiative.

 

Xiaomi Launches $1.7 Billion Fund in Hubei
Smartphone maker Xiaomi Inc. and two partners in central China’s Hubei province will set up a 12 billion yuan ($1.74 billion) fund to promote the company’s “ecosystem” of products and services, as the former highflier tries to reverse its downward slide over the last two years.

 

Foxconn ramps up Hunan plant
Foxconn Technology Group plans to open a production center in Central China's Hunan province for Amazon.com Inc, as part of its effort to diversify and reduce its reliance on Apple Inc. The center, based in Hengyang, will produce an array of devices for Amazon.

 

Chinese Train Maker Scores Breakthrough U.S. Order
China’s oldest railway equipment maker will export the country’s first stainless steel trains to North America, according to China Daily. Philadelphia’s transit agency will buy 45 multi-level commuter rail cars, with an option for 10 more, from CRRC Tangshan Co.


Meanwhile China Railway Rolling Stock Corp. (CRRC) says it will begin building a plant in Moncton, New Brunswick, Canada to expand its North American operations.

 

Chinese Firm Signs Bangladeshi Metro Deal
Dhaka Mass Transit Co. Ltd., a Bangladeshi state-owned enterprise founded to implement a new metro system, has signed deals with China’s Sinohydro Corp. Ltd. and Italian-Thai Development Public Co. Ltd., a Thailand-based construction firm, to build the country’s first metro rail line.

 

Scottish Distillery Toasts Chinese Distribution Deal
One of Scotland’s oldest whisky producers said it is tapping into the lucrative Chinese thirst for the drink after securing a major distribution deal with one of China’s food and beverage giants. Loch Lomond Group, based in Alexandria in Scotland, has entered into a partnership with COFCO.

 

Norwegian Cruise Line Holdings partnering with Alibaba Group to target Chinese cruisers
Miami-based Norwegian Cruise Line Holdings is partnering with the Chinese e-commerce company Alibaba Group to better target Chinese customers.

 

Chinese Investment in Australia Surges 11.7% as Deals Hit Record
Chinese investment in Australia surged 11.7 percent last year to A$15.4 billion ($11.5 billion) amid booming demand for agricultural assets and infrastructure, according to a report released Monday.

 

Companies/People

 

Shanghai Contemplates Possible Facebook Office
Shanghai may be considering allowing Facebook to set up an office in the city. The Shanghai Municipal Commission of Commerce and the social networking giant's representatives discussed the possibility in China on Thursday, according to the offical WeChat account of the Shanghai Municipal Commision of Commerce.


With New Funding, Didi Chuxing, an Uber Rival, Looks Beyond China
When Uber pulled out of China last summer, it appeared to be the end of two years of frenzied competition with the local rival Didi Chuxing. Yet with a new funding round that has brought in $5.5 billion, it seems the Chinese firm wants to take the rivalry global.

 

Anbang, Chinese Company With Global Reach, Faces New Scrutiny
Wu Xiaohui, the Chinese tycoon who was in failed talks with President Trump’s son-in-law, Jared Kushner, to buy into a skyscraper project in Manhattan, is fighting allegations of financial chicanery and has threatened to take legal action against Chinese financial magazine Caixin, that examined his company’s labyrinthine funding.


Meanwhile A Chinese regulator announced on Friday that it had taken disciplinary measures against the Anbang Insurance Group, for the improper sale of two investment products.

 

Baidu CEO Robin Li Lays Out Mission To Turn Search Engine Firm Into AI Leader
Robin Li, founder and chief executive officer of Baidu Inc., sent an internal letter to staff yesterday and stressed again the importance of Baidu's artificial intelligence strategy. He predicted that AI will be the center of the company's future.

 

Morrison & Foerster adds fund formation partner in Hong Kong
Morrison & Foerster has hired Serena Tan, formerly an associate at Debevoise & Plimpton specializing in fund formation and fund management, as a partner in its Hong Kong office. Tan spent five years with Debevoise in Hong Kong and before that worked for Cleary Gottlieb in New York.

 

WeChat to make payment service available in US
WeChat is already one of China's most popular mobile payment methods. Now the social media app, owned by Internet giant Tencent, is teaming up with Silicon mobile payment startup Citcon to take its services to the US market.

 

Struggling Shenyang Machine Tool Gets $1.4 Billion Government Lifeline
Shares of Shenyang Machine Tool Co. Ltd. fell 2.5% on Thursday as trading in the stock resumed after announcing major new support from its hometown city government for the massively money-losing company.

 

LeSports Cancels Soccer Event, Raising Concerns About Finances
Sports fans waiting online to watch an early Wednesday soccer game of the UEFA Champions League were left hanging when broadcaster LeSports canceled its live streaming event at the last minute.

 

Other Updates


China Reserves Rise a Third Month Amid Tighter Capital Controls
China’s foreign-exchange reserves rose for a third month in April, beating estimates, as tighter capital controls kept money from flowing out of the country and the yuan was stable. Reserves climbed $20.45 billion to $3.03 trillion, the People’s Bank of China said Sunday.


China's Services Sector Accounts For 56% Of GDP, But Does It Matter?
China’s transformation into a services-led economy continues. During the first quarter, the service sector accounted for 62% of growth and represented 56% of total GDP, compared to just 42% back in 2006. Is the trend sustainable, and does it matter in terms of China's economic future?

 

Banking Regulator Warns of Overseas Lending Risks
The head of China’s banking regulator warned in a recent closed-door meeting about the mounting risk in banks’ overseas loans. Guo Shuqing, chairman of the China Banking Regulatory Commission (CBRC), asked banks to cooperate with the People’s Bank of China, the country’s central bank, and with the State Administration of Foreign Exchange (SAFE), the foreign-exchange regulator, to minimize institutional risks.

 

China's Renewed Campaign to Tame Its Debt Pile Starts to Bite
Signs are emerging that the Chinese government’s renewed drive to curb financial leverage is starting to bite. The number of wealth-management products issued by Chinese banks slumped 39 percent in April from the previous month, while trust firms distributed 35 percent fewer products, according to data compilers PY Standard and Use Trust. Sales of negotiable certificates of deposit, a popular instrument of interbank lending known as NCDs, tumbled 38 percent from a record.

 

Chinese Companies Backpedal on 140 Billion Yuan Bond Issuance
Chinese companies delayed or cancelled plans to issue nearly 140 billion yuan ($20.3 billion) worth of bonds and other short- and midterm debt instruments in April amid tightening liquidity and rising debt-financing costs in the country’s interbank market.

 

Beijing doesn’t know when to stop – or even how to do so
In an unusual move, President Xi Jinping summoned the country’s finance industry watchdogs and ordered them to take stock of risks and uphold regulatory vigilance, reflecting his deep concern about the dangers facing the mainland economy.

 

China's RMB Internationalization Has Slowed As Stability Trumps Reform
Progress toward the Chinese RMB becoming a more important global currency has lost momentum over the last two years, notwithstanding its landmark inclusion in the IMF's Special Drawing Rights (SDR) currency basket in late 2016, says Fitch Ratings.

 

Chinese media warns of 'tax war' after Trump pledge to slash rates
Chinese leaders are worried about Donald Trump engaging in a “tax war” with Beijing, potentially fuelling tensions between the two countries already strained by problems such as North Korea, trade and the South China Sea.

 

China To Allow Venture Firms To Raise Capital Via Bond Issuance
The Chinese securities regulator is considering a new set of policies to allow venture firms to raise money via bond issuance in the capital markets, as part of a national campaign to simulate innovation.

 

Tianjin Unveils Plan to Allow Employees of SOEs to Buy Company Shares
The northern port city of Tianjin has become the latest municipal government to unveil plans to allow employees to buy shares of state-owned enterprises (SOEs), as China moves to deepen reforms and breathe new life into the inefficient state sector.

 

Large Banks Required to Set Up Inclusive Finance Divisions
China’s large commercial banks have been asked to set up inclusive finance departments to support small companies, agriculture, poverty relief and entrepreneurship by the end of 2017.

 

Regulators Set to Unveil ‘Bond Connect’ in July: Report
Hong Kong and mainland Chinese regulators are set to formally unveil a long-awaited scheme to connect China’s $8 trillion bond market with overseas investors in July, with the launch expected in the autumn.

 

Chinese Tech Investments Spur Huge Returns for Pint-Sized ETF
Take China and technology, put them together, and what do you have? One of the best performing exchange-traded funds in the world. The tiny $48 million Emerging Markets Internet and E-commerce ETF, or EMQQ, is up 32 percent this year, putting it among the 30 top returning equity ETFs worldwide.

Category: Daily Newsletter 

Tags: Baidu, Alibaba, IPO, ChemChina, Ant Financial, Anbang, Vanke, Xiaomi, Tencent, Hony Capital, Lufax, SAFE, Didi Chuxing, meituan dianping, Ctrip, Temasek, Bona Filim, Baoneng Group, HNA Group, Santos, Deutsche Bank, PBOC, Syngenta, Matrix Partners China, CRRC, China Renaissance, Fidelity International, CDH Investments, Yingde China, CreditEase, IDG Capital, LeSports, Hillhouse Capital, Foxconn, Yunfeng Capital, MoneyGram, China Oceanwide, Genworth, JD com, PAG Asia Capital, Momo, Sinohydro, MakeMyTrip, CEFC China Energy, Welight Capital, PingAn, CBRC, BGI Genomics, Haier Capital, Zhengzhou Coal Mining, Robert Bosch, COFCO, LongiTech Smart Energy, Belle International, Go-Jek, Tokopedia, Romaco, Truking, Tencent Music, Youon Bike, Haidilao, Jushenghua, China MerchantsSecurities, Nav, Jumei, Ankerbox, Cheetah Mobile, Evolution Media China Gobi Partners, China Rapid Finance, Broadline Capital, Huochebang, Wuxi NextCODE, Congenica, Jin Jiang International, Canaan, Transwrap Technology, China Minsheng Investment Group, Loch Lomond Group, Wu Xiaohui, Robin Li, Shenyang Machine Tool