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China buys $3bn Blackstone stake | China buys $3bn Blackstone stake |
(40 minutes later) | |
The Chinese government has agreed to pay $3bn (£1.5bn) for a 10% stake in US private equity company Blackstone. | The Chinese government has agreed to pay $3bn (£1.5bn) for a 10% stake in US private equity company Blackstone. |
The move will give Blackstone a head start in Chinese takeover deals and allow China's government to tap into the global private equity boom. | The move will give Blackstone a head start in Chinese takeover deals and allow China's government to tap into the global private equity boom. |
The news, which is likely to create some political opposition in the US, comes just days before Chinese Vice Premier Wu Yi visits America. | The news, which is likely to create some political opposition in the US, comes just days before Chinese Vice Premier Wu Yi visits America. |
China is buying the stake through its newly formed state investment fund. | China is buying the stake through its newly formed state investment fund. |
'Enhancing access' | 'Enhancing access' |
"For both China and Blackstone, it's about enhancing access and developing deeper relationships," said analyst Monte Brem, chief executive of advisory firm Leucadia Capital Partners. | "For both China and Blackstone, it's about enhancing access and developing deeper relationships," said analyst Monte Brem, chief executive of advisory firm Leucadia Capital Partners. |
"The Chinese government wants to increase its access and role in the global private equity market; Blackstone wants to increase its access and role in China." | "The Chinese government wants to increase its access and role in the global private equity market; Blackstone wants to increase its access and role in China." |
For Blackstone, the deal will give bring an inevitable advantage when investing in China, where foreign companies often struggle to gain support from Beijing when trying to buy Chinese companies. | For Blackstone, the deal will give bring an inevitable advantage when investing in China, where foreign companies often struggle to gain support from Beijing when trying to buy Chinese companies. |
But the deal will raise eyebrows among some US politicians wary of China's growing economic clout. | But the deal will raise eyebrows among some US politicians wary of China's growing economic clout. |
In 2005, China's plans to buy US energy giant Unocal fell through in the face of fierce political opposition in Washington. | In 2005, China's plans to buy US energy giant Unocal fell through in the face of fierce political opposition in Washington. |
China's purchase will be part of Blackstone's $7bn share floatation, planned for next month. |