U.S. venture capital groups are beginning to actively eye plays in Chinese mainland, reported June 22,2009's China Daily, citing a report by UK-based Mergermarket Group, an intelligence provider on mergers, acquisitions and private equity.
According to the report, the most high-profile deal this month was U.S. private equity giant Bain Capital's move to acquire a minority stake in Gome, the Chinese electrical appliance retailer, for about 400 million U.S. dollars.
Gome will reportedly sell 12-percent of its share to Bain through convertible bonds and a rights issue of new shares equivalent to 18 percent that will be taken up by Bain and other existing shareholders including JP Morgan, Morgan Stanley and Warburg Pincus. If the deal is consummated, it will be Bain's largest buyout in China to date.
Another U.S. private equity firm Warburg Pincus announced the expiration of an option it held to swap convertible bonds in Huiyuan Juice this month.
In conjunction with two other private equity houses and Danone, the French food retailer, Warburg Pincus purchased a 35-percent stake in Huiyuan for 200 million U.S. dollars in the second half of 2006. The investment would have proved lucrative if Coca-Cola's2.4 billion U.S. dollars bid for Huiyuan had been successful.
The buyout group continues to hold investments worth over 400 million U.S. dollars in 11 Chinese businesses.
Douglas Robinson, editorial research analyst with Mergermarket Group said the reason why U.S. buyout firms once again had the mainland in their sights was that the country has a population of more than three times the size of the U.S., a rapidly burgeoning middle class and an economy which has arguably avoided the worst effects of the global financial crisis.
Source:Xinhua
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