Business Activities News
- Goldman Sachs to buy stake in Midea
Date: 24-Nov-2006 Sources: (Shenzhen Daily)
GOLDMAN Sachs will buy into Midea, a manufacturer of air conditioners, freezers and dishwashers, making the U.S. investment bank the second-largest investor in the Chinese firm, a domestic newspaper said Thursday.
A source familiar with the situation said that 'a strategic investor?is about to buy into Shenzhen-listed Midea.
Midea's domestic currency A shares were suspended from trading from Tuesday pending an announcement related to 'important business matters.'The counter closed at 12.79 yuan (US$1.63) Monday, having surged nearly 40 percent since the start of this month.
The Chinese Government, aiming to lure more foreign cash, said this year it would let foreign investors take 'strategic stakes?in listed firms by buying their freely floated A shares for the first time, a new investment channel that is in addition to the Qualified Foreign Institutional Investor program.
The rules require foreign investors to buy a minimum 10 percent stake in an A-share company and hold the shares for at least three years.
That would value Goldman's purchase at least about US$100 million based on Midea's total stock market capitalization of more than US$1 billion.
The report said Goldman would become the second-largest shareholder after the placement, but did not say how many shares Goldman would take.
The reported attempt to buy into Midea comes after Goldman signed a deal this week to buy a US$113 million stake in China's biggest auto glass maker Fuyao Glass.
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