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Yet Another Chinese Company Anshan Steel gets Blocked from acquiring a USA Company

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While US-China relations remain normal with the biggest trade relationship¬† in the world,there is always an undercurrent of mistrust between the world’s two largest economies.Chinese companies have been repeatedly blocked from acquiring US assets and technology due to Security Concerns.This is quite notable as US does not normally reject any foreign takeovers of its companies.Recently Telecom Equipment Giant Huawei failed in its takeover attempt of an US Technology Asset.This was not the first time that Huawei has been blocked as earlier its buyout attempt of 3Com was summarily dismissed by the US government.One of the main reasons for the concern is that most Large Chinese companies are State Owned with close ties with¬† the Communist Government.This makes the US lawmakers cagey about Chinese investments.The concerns are only growing stronger as Anshan Steel,the 4th largest Chinese Steel Maker was blocked from investing in US based Steel Development Company.The move was opposed by 50 lawmakers on both sides of the political spectrum ultimately leading Anshan to call off its bid.Note Steel is not a High-Tech Product and the rejection seems to indicate a further level of Chinese mistrust.China has also not been too considerate of US takeover attempts of its companies.The most famous rejection was Coke’s $2.3 Billion Bid for Juice Maker Huiyan.

China’s Ansteel may scrap US steel deal: State media – ET

China’s Anshan Iron and Steel Group may scrap an investment deal with a US steel mill due to opposition from American lawmakers, state media said Friday. The state-run Chinese mill, also known as Ansteel, signed an agreement with Mississippi-based Steel Development Company in May that includes construction of five plants in the United States.

Fifty US legislators have sent letters to President Barack Obama and Treasury Secretary Timothy Geithner urging them to investigate the deal, arguing the investment threatened US jobs and national security.

USA Rejection of Chinese Takeover of Domestic Companies

Here is a list of US Rejection of Chinese Takeover of Domestic Companies.These are only the famous ones and do not form a comprehensive list.Most of these rejections have come in the past 5 years as China’s Companies look to expand abroad.China has been on a massive buying spree spending over $30 Billion last year alone on acquisition of foreign assets.

1) CNOOC bid for Oil and Gas Company Unocal – Why China’s Unocal Bid Ran out of Gas – Bloomberg

2) Chinese bid for control of Gold Miner FirstGold – Chinese Withdraw Offer for Nevada Gold Concern

3) Chinese Southern Media Group Bid for Newsweek – Why China lost Newsweek bid

4) Huawei Bid for 3Com – Huawei’s 3Com Deal Flops

PG

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in

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