US private equity group Carlyle has passed an important step in its controversial effort to acquire a stake in a Chinese construction equipment company after a key government agency gave its approval to the deal.
The State-owned Assets Supervision and Administration Commission (Sasac), the government body that controls state-owned companies, decided Carlyle could take a 50 per cent stake in Xugong Construction Machinery, a person familiar with the situation said.
But although he said Carlyle was now confident of getting final confirmation, the company still needed the approval of the Ministry of Commerce and the stock market regulator. Xugong also said that Sasac had given the green light for the deal.
Carlyle announced in October last year that it had agreed to pay $375 million for an 85 per cent stake in Xugong, a listed company whose parent group is controlled by the local government of Xuzhou city in Jiangsu province. More than a year later, however, the deal has yet to win approval in Beijing and became caught up in a backlash over foreign investment in the Chinese economy at a time when the Government has been selling minority stakes in large banks.
Rival construction group Sany Heavy Industry conducted a fierce campaign against the proposed takeover, including a heavily nationalist weblog penned by the company"s chief executive.
In a bid to overcome political resistance, the terms of the deal were changed last month to make it a joint venture, with Carlyle taking a 50 per cent stake in the Chinese company.
|
English
Espanol
Русский
Articles