This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/6675453.stm
The article has changed 9 times. There is an RSS feed of changes available.
Version 7 | Version 8 |
---|---|
China buys $3bn Blackstone stake | China buys $3bn Blackstone stake |
(about 1 hour 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. |
It will give Blackstone a head start in Chinese takeover deals and allow China's government to tap into the global private equity boom. | It 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 the United States. | The news, which is likely to create some political opposition in the US, comes just days before Chinese Vice Premier Wu Yi visits the United States. |
China is buying the stake through its newly formed state investment fund. | China is buying the stake through its newly formed state investment fund. |
Share sale | Share sale |
Blackstone has also given details of its planned share sale. | Blackstone has also given details of its planned share sale. |
The second largest US private equity firm plans to raise between $3.87bn (£1.97bn) and $4.13bn (£2.10bn) in its initial public offering later this year. | The second largest US private equity firm plans to raise between $3.87bn (£1.97bn) and $4.13bn (£2.10bn) in its initial public offering later this year. |
Shareholders will own a stake in the management company rather than the portfolio of companies in which it has invested. | Shareholders will own a stake in the management company rather than the portfolio of companies in which it has invested. |
They will have only limited voting rights and no right to elect the general partner or directors. | They will have only limited voting rights and no right to elect the general partner or directors. |
Blackstone will list on the New York Stock Exchange with the symbol BX. | Blackstone will list on the New York Stock Exchange with the symbol BX. |
'Enhancing access' | 'Enhancing access' |
Together with the investment from China, Blackstone could raise up to $7.75bn. | Together with the investment from China, Blackstone could raise up to $7.75bn. |
When the Chinese are buying into private equity, every investor in the world should take note BBC Business Editor Robert Peston Why the deal matters | |
"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 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 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. |
Political problems? | |
In 2005, China's plans to buy US energy giant Unocal fell through in the face of political opposition in Washington. | |
The new fund will be trying to avoid any political problems with its overseas investments, according to Jesse Wang, chairman of the government-owned Jianyin Investment, which represented Beijing in the deal with Blackstone. | |
"The fund is sizable and people may worry that it's from China and a state investment vehicle," he said. | |
"I think they are going to have mostly commercial kinds of investments, not involving sensitive investments." |