Chinese expansion in the US Congress alarmed

This year promises to be a record number of Chinese purchases of US companies. US Congress worried that trend.

Last month, 45 members of Congress wrote a letter to the Foreign Investment Committee of the US Ministry of Finance (CFIUS). In it, they expressed concern because of the intention of the Chinese investors to buy the Chicago Stock Exchange, and demanded a thorough investigation of the potential transaction.

Of course, worried US lawmakers not only the potential purchase of one of the country’s largest stock exchanges. This week, Sen. Sherrod Brown wrote a letter to Finance Minister Jacob Lew. In it he stressed once again that the enhanced concern about the increased activity of Chinese business in the US, buying up American companies.

Among the already announced this year for transactions ChemChina buying a record $ 48 billion company Syngenta, HNA Group - Ingram Microza (6.3 billion dollars), Haier - Branch of General Electric for the production of household appliances (5.4 billion), Zoomlion - construction products and other industrial equipment Terex (4,9 billion).

In January, a lot of talk about the acquisition of a controlling stake in a major Hollywood film studio Legendary Entertainment Chinese giant Dalian Wanda.

And this is only the most high-profile deals. All in all, this year in less than three months announced 170 transactions of mergers and acquisitions of Chinese business of American companies, according to Dealogic, the total amount of 105 billion dollars. In much the same was the total volume of transactions in the last year - 607 deals worth a total of 112.5 billion dollars, but only for the 12 months instead of one quarter.

Experts believe that Chinese companies seeking to expand in spite of the slowdown in the Chinese economy and that they grow by acquiring businesses abroad. Another object of increasing purchases - to gain access to the closed first for the Chinese business market. In the case of Haier there is not only a desire to enter the US market, but also to gain access to the GE brand. In the case of the purchase of Syngenta ChemChina has access to technology, research and development. In the case of Dalian Wanda Chinese holding, by the way, in the United States has one of the largest cinema chains, will have control over Legendary Entertainment content, ie movies.

However, Congress is concerned that some deals will give Chinese companies, most of which are public, access to the latest technology or important technical information.

Take, for example, record the purchase of Chinese state-owned company ChemChina one of the world leaders in the field of plant protection and seed company Syngenta. This Swiss company, but its biotech unit located in the United States. According to Sen. Chuck Grassley, the acquisition of its Chinese could threaten America’s national security.

The same anxiety among American legislators with regard to the purchase of Chinese company Zoomlion Terex, which often executes orders of the Pentagon, NASA and the US Ministry of Internal Affairs and, of course, has secret information. A number of senators from both parties demanded that the CFIUS carefully check the deal.

US regulators and no reminders are closely watching the foreign buyers. Especially Chinese. Recently, the CFIUS, for example, Philips has forbidden to sell its American branch of Chinese buyers. The transaction value is estimated at $ 3.3 billion.

25 March 2016

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