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China: Companies look to big US mergers to balance hefty fines

By  |  October 23, 2013

Reports say Chinese firms are favoring big-time buyouts of US companies as a method of balancing out the hefty regulatory and legal fines that come with acquiring a US company.

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    Chinese firms are willing to handle such steep fines, say reports, as they see US takeovers as more adventitious than takeovers of EU firms.

    Reports of this trend come following news that Chinese investment in US companies reached an all-time high in the first three-quarters of the year, topping $11.2 billion – a 94 percent increase from the same time period last year.

    Much of that figure was supported by Chinese-based Shuanghui, which spent $4.7 billion on its takeover of US meat company Smithfield Foods.

    That figure also supports the notion that Chinese firms prefer to completely buyout US firms instead of acquiring sections of a company, likely due to financial fees.

    Full content: South China Morning Post

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