Caution Urged For China State-Owned Enterprises In Foreign M&A
September 05 2009 - 10:45AM
Dow Jones News
China's state-owned enterprises should adopt a cautious stance
in overseas mergers and acquisitions to prevent wrong
decision-making in strategic purchases in the future, said a senior
government official at a financial conference Saturday.
Around 150 state-owned enterprises have sought
merger-and-acquisition opportunities at home and abroad in the
first half of the year, and "my advice (to them in the future)
would be - be cautious - as the ultimate goal for any overseas
merger and acquisition is to improve the company's
competitiveness," said Li Rongrong, chairman of the State-owned
Assets Supervision and Administration Commission, on the sidelines
of the conference.
"Without (the possibility of) achieving that, anything would be
uncalled for," Li added.
This comes after renewed talks between Aluminum Corp. of China
Ltd. (2600.HK), also known as Chinalco, and Rio Tinto PLC (RTP) on
a possible bauxite and alumina deal, indicating Beijing's wary
stance on overseas merger and acquisition especially after the
collapse of Chinalco-Rio deal.
Rio Tinto abandoned a $19.5 billion alliance with Chinalco
earlier this year, turning instead to a sizable equity raising to
ease debt burden.
-By Yue Li, Dow Jones Newswires; (8621) 6120 1200;
yue.li@dowjones.com