Chinese takeovers challenged by Cfius

Author: Brian Yap | Published: 23 Mar 2016

As China’s global M&A spending has grown, counsel have pointed to a concurrent rise in the number of investigations launched by the Committee on Foreign Investment in the United States (Cfius) into takeover bids from foreign buyers.

Driven by regulatory relaxation and market volatility at home, the world’s second-largest economy reached its highest number of outbound deals last year. Chinese companies completed $61 billion worth of transactions out of 607 announced deals valued at $112.5 billion, according to data compiled by Bloomberg and Rhodium Group.

According to Nima Amini, partner at O’Melveny & Myers in Hong Kong, there has been a growing bias in certain sectors against Chinese buyers, partially as a result of recent high-profile cases in the US where Chinese deals have been blocked due to national securities issues. "This creates various execution challenges that extend far beyond cultural barriers," said Amini.