Business Activities News
- Carlyle cuts proposed stake in Xugong
Date: 19-Mar-2007 Sources: (Shenzhen Daily)
U.S. private equity fund Carlyle has agreed to settle for a minority stake in China's biggest machinery maker, Xugong Group Construction Machinery Co.
Carlyle agreed to lower its proposed stake to 45 percent from 50 percent, a source close to the deal said Friday, the second reduction in the year-and-a-half-long buyout saga.
Several other proposed foreign acquisitions in the country are also on hold, with the government determined to retain control over key assets and ensure a good price in any deals.
'The two sides have revised the agreement today and Xugong will put out an announcement soon,'said the source, who asked not to be identified.
The deal still requires regulatory approval, the source added.
Executives at Xugong, a major manufacturer of construction equipment in China's booming economy, and a Carlyle spokeswoman in Hong Kong declined to comment Friday.
Xugong Science & Technology Co., the company's Shenzhen-listed unit, was suspended from trading Friday, pending an important announcement.
In October 2005, Carlyle agreed to buy 85 percent of Xugong for US$375 million.
After some officials balked at letting the U.S. buyout firm have such a major stake, Carlyle agreed last October to take only 50 percent.
The Carlyle-Xugong deal has since become a benchmark of the government's attitude towards foreign access to key industrial assets.
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