Car parts, copper and chrome

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Zhejiang-Geely-Ford-bidder-Volvo-浙江吉利 福特 沃尔沃 优先竞购方
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The bid by Zhejiang Geely, named by Ford in late October as the preferred bidder for its Volvo subsidiary, is one of a number of eye-catching overseas forays by Chinese companies which have hit the headlines. In the meantime, lawyers have been quietly busy on outward investment deals spanning the globe from east to west, suggesting that the globalization of Chinese business goes beyond just a handful of high-profile mega-deals.

The Beijing and Istanbul offices of Gide Loyrette Nouel have advised Taiyuan Iron & Steel (TISCO), China’s largest stainless steel producer, on an investment worth approximately US$300 million in three Turkish mining companies. As well as acquiring shares in the three companies, TISCO acquired 15 chrome ore mining licences. The raw material from the mines is expected to be used in TISCO’s stainless steel production. Gide advised TISCO on all aspects of the acquisition, including the evaluation of the foreign investment environment in Turkey and advising on Turkish employment issues for Chinese staff.

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Also in the mining and metals sector, Baker & McKenzie acted for Guangdong Rising Asset Management in its acquisition of a 19.9% interest in PanAust. PanAust, listed on the Australian Securities Exchange, operates the Phu Kham copper-gold mine in Laos and the Puthep copper exploration project in northeast Thailand. Guangdong Rising is a Chinese group with investments in listed and unlisted companies across several sectors including technology, hotels and construction, as well as non-ferrous metals.

Approval of the PanAust deal was granted by the Australian Foreign Investment Review Board within the required 30 days of the announcement of the deal, which was completed in late September.

Moving further west, Vinson & Elkins represented Capital Iron & Steel (Shougang) and its joint venture company Beijing West Industries (BWI), in connection with BWI’s acquisition of Delphi Corporation’s global suspension and brakes business. US-based Delphi is the former automobile parts subsidiary of General Motors and has been under Chapter 11 bankruptcy protection since 2005. The acquired business employs approximately 3,000 staff in the United States, Poland, France, the United Kingdom, Mexico and China. The total value of the acquisition, which was announced in November, was close to US$90 million.

According to Paul Deemer, co-managing partner of Vinson & Elkins’ Beijing and Shanghai offices, the fact of Delphi being in bankruptcy added extra complexity to the transaction. “Distressed M&A deals move at a much faster pace than traditional M&A deals and the acquisition had an extremely tight schedule for due diligence and the negotiation of sale & purchase documentation,” said Deemer.

https://law.asia/bhat-goes-platinum/

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