Posts tagged " HNA "

China M&A: Rational Deals Only

August 18th, 2017 Posted by Capital Markets, China Business Development, M&A No Comment yet

China’s State Council issued a statement today formalizing new rules around outbound investment. The statement criticized “irrational” overseas investments in certain sectors. Recent media headlines have focused on the increased regulatory scrutiny placed on China’s most aggressive dealmakers at  HNA Group, Dalian Wanda Group, Fosun International, and Anbang Insurance for their real estate and entertainment acquisitions.

The statement clarified three types of investment:

  • Encouraged: Investments that further Belt and Road framework, enhance China’s technical standards, research and development, oil and mining exploration, agriculture and fishing.
  • Restricted: Property, hotels, film, entertainment, sports, obsolete equipment, investments that contravene environmental standards.
  • Banned: Military, gambling, sex industries, and “investments contrary to national security.”

Conclusion: If you are selling a casino with related services, don’t expect PRC bidders.

Read the Bloomberg article here.

How Chinese Companies Finance Overseas M&A

March 5th, 2017 Posted by Capital Markets, China Business Development, M&A No Comment yet

Wall Street Journal reporter Anjani Trevedi takes a closer look at how China’s HNA Group, a recent buyer of stakes in Hilton Worldwide Holdings, Skybridge Capital, and a host of other assets, has used credit-enhanced debt offerings to deploy capital overseas. In a typical transaction, a Chinese bank will provide standby letters of credit to back loans issued by Chinese buyers. The credit line, which is in turn backed by RMB cash deposits in China, is then used as collateral by the buyer to borrow USD offshore.

Read the WSJ article here.