For the time being, China’s central government will say “bu hao” (not good) to any moves of its government-backed automakers to do any overseas mergers and acquisitions, International Business Times reports via Gasgoo. It’s not that the Chinese government is against the idea. They think, global asset prices will continue to drop, and better terms can be reached for offshore acquisitions by waiting. “The State-owned Assets Supervision and Administration Commission hopes the manufacturing companies, will adopt a wait-and-see attitude to purchasing global assets,” said commission chief Li Rongrong in a recent internal meeting. A mole in the commission said “Beijing won’t approve of automakers and banks to purchase overseas assets in the near future unless the buyers can prove the strategic importance of securing the deals.” Meaning what?
As all large Chinese automakers are completely, or to some extent government-backed, the edict from Beijing means that Volvo, Saab, et al. are now out of buyers of last resort. The timing of the announcement is interesting. New US Secretary of State Hillary Clinton had just been in Beijing and profusely thanked the Chinese government for buying US debt. Conspiracy theorists undoubtedly will speculate that hints may have been dropped that asset prices of US automakers will get cheaper after Chapter 11. Which of course is pure fantasy . . . .
After seeing Jaguar and Range Rover go to India…anything is possible.
But the last thing as an American I wanna see is Ford or GM fall into Chinese hands.
But what’s scary is how much capital they are sitting on. They could actually buy GM and Ford entirely if it was allowed to happen.
The US government already bought GM and Chrysler so it would be too late. The auto companies are worthless, well actually they have a negative value. Saw where GM was actually worth minus $92 billion, if you do the math. And the economy is going to get a lot worse.
After seeing Jaguar and Range Rover go to India…anything is possible.
Tata bought Jaguar and Range Rover before the bust. Tata is now in dire financial straights itself. Tata could not do the deal today.
Saab is done. The reorganization will not happen. It will shut down.
Volvo has a chance.
“They could actually buy GM and Ford entirely if it was allowed to happen.”
Who couldn’t?
The combined market cap of Ford and GM is about $5.5 billion, a number of individuals could buy both companies outright with no financing.
Actually, it looks like there are 188 people that could buy both GM and Ford outright. One of the individuals is Chinese.
http://www.forbes.com/lists/2008/10/billionaires08_The-Worlds-Billionaires_Networth.html
Flashpoint said:
But the last thing as an American I wanna see is Ford or GM fall into Chinese hands.
I fail to see why. Everything have a price to it. If you think the Chinese pays too little for GM, why don’t you bid it up?
Don’t put too big of a price tag on GM’s technologies. Even though they are better than what the Chinese have, they are still inferior to what the Japanese have. So, it’s not a guaranteed money maker from the point of the Chinese.
Nobody would buy GM or Chrysler except to get their hands on the government billions. Do you want to be saddled with a million retirees with a large number of them in their forties and fifties?
@bluecon: Nobody’s talking buying the companies w/ their liabilities. They are talking assets sans baggage. Cheap after C11. Even cheaper after C7.
Isn’t it ironic that the ad at the top of this very page is “chnlove.com”, a Chinese match making site?
The 41 y.o. “girl” up there probably used a fake picture.
China wants our retirees?
just parts of them
The Chinese aren’t stupid; they just don’t want to buy losing companies – it doesn’t matter how cheap they are. Just because they have money doesn’t mean they want to jump into the Beg 3 cesspool.
Besides, they could invest the same amount in domestic Chinese car companies and yield far more success and payback.
Dzwax
HAHAHAHAAH