Tags: China | US | firms | acquisitions

CNNMoney: Chinese Investors Buying US Firms in Droves

Thursday, 13 Dec 2012 07:50 AM

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The value of Chinese acquisitions of U.S. firms hit a new high this year, reaching $10.5 billion, up 18 percent from $8.9 billion in 2007, a previous record, CNNMoney reports, citing Dealogic data.

Everything from movie theaters, to electric car battery makers to even bigger assets are falling into Chinese hands, including an 80 percent stake in AIG’s aircraft leasing unit, which went to Chinese investors for $4.2 billion.

“These are companies with very strong positions in their home markets, and management is increasingly sophisticated,” Colin Banfield, head of mergers and acquisitions for Asia Pacific at Citigroup, told CNNMoney.

Editor's Note:
'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist.

“They are much more comfortable going out and doing cross-border deals.”

Other high-profile companies have seen their headquarters move from the United States to China.

Chinese auto parts maker Wanxiang Group bought A123 Systems, a maker of lithium-ion batteries, for $256.6 million, while Dalian Wanda bought U.S. cinema chain AMC for $2.6 billion earlier this year.

The A123 deal requires regulatory approval due to ties with military and government controls.

“Chinese companies are going in very strategically, and laying the groundwork for deals,” said Anthony Root, head of Milbank’s Asia corporate practice, CNNMoney added.

“When it comes time to pull the trigger and do a deal, people already know who they are, and they have channels of communication.”

Prior to the auction, A123’s government business was spun off and sold to a U.S. firm to calm the regulators, though the company’s technology will be headed to China, which has some policymakers nervous.

“Given the thin line between Wanxiang and the Chinese government, I am concerned about the government of China having access to sensitive technologies being used by our military forces,” said Rep. Bill Huizenga, a Republican from Michigan where A123 has plants, according to Reuters.

Editor's Note: 'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist.

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