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Opinion: Yanzhou Coal shows sense and sensitivities

Date: 02 Oct 2009

The Chinese company has indicated that it could list Australian assets if it gets the go-ahead by the country’s foreign takeover regulator to acquire Felix Resources. It is an astute move and other mainland companies would be wise to follow suit.

Keywords (click to search): [China] [M&A] [Yanzhou Coal]

Richard Morrow
Chinese businesses have had their fair share of success when it comes to acquiring overseas. But in recent months tensions have been rising over some of their bids.

Witness the difficulties endured by some state-linked companies in Africa. Investment inflows from China to Africa are still on the rise – hitting US$106.8 billion in 2008 – yet some African nations are beginning to say no to Beijing’s desire to buy local assets.

On September 8, Libya vetoed a US$462 million bid by China National Offshore Oil Corp. (CNOOC) for Verenex Energy, and just a few days afterwards Angola’s state-owned Sonangol said it did not want CNOOC and Sinopec to acquire Marathon Oil’s 20% stake in a local oilfield.

Some of this recent resistance is in part because Chinese companies are notorious for bringing in their own professionals, employing very few locals. And while they do tend...

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