皇冠体育app

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How far will 皇冠体育app's expansion bids go
(Xinhua)
Updated: 2009-06-17 13:19
Draw More Lessons

But Yao said a notable factor in the case is the international inexperience of 皇冠体育app's business leaders.

"The speed of global expansion has given Chinese companies little practice of the pitiless reality of Western-style acquisitions," he said.

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Xiong Weiping, 皇冠体育applco's chairman, has said that 皇冠体育applco had worked hard to respond constructively and engage with Rio Tinto to appropriately amend the transaction terms announced four months ago, but the result was completely out of the company's control.

Yao said 皇冠体育applco's failed attempt was due to its management's insufficient understanding of the concerns of big Western resource companies, their governments, public and shareholders with 皇冠体育app's entering into the foreign resource sector, and of the possibility of a stock price resurgence and its consequences.

"皇冠体育applco should have pressed its negotiating advantage harder and not given Rio time to seek alternatives. Besides, a 1-percent break-up fee for a US$19.5 billion deal makes breach of contract too easy," he said.

Yao's opinion was shared by his colleague, Dr. Dylan Sutherland, a scholar in Contemporary Chinese Studies at the University of Nottingham.

"The complicated deal 皇冠体育applco proposed created a long gestation period and opened up possibilities for market corrections and greater political scrutiny," Sutherland said.

"The major lesson is to keep trying. The markets moved against 皇冠体育applco. It may have opted for a simpler equity deal and acted faster, but it is not clear then this would have given it exactly what it wanted."

In the deal between 皇冠体育app's Minmetals and Australia's OZ minerals, Minmetals' last-minute decision to sweeten its offer with an extra US$180 million proved decisive in winning over OZ Minerals shareholders. The improved offer helped Minmetals see off two rival bids for the miner.

Minmetals won Australian government approval in April to take over OZ Minerals with a revised offer after the previous bid was rejected on national security grounds. The new offer excluded one of OZ's flagship mines located near a military range.

"There will always be political pressures on big business investing overseas," Sutherland said. "Chinese enterprises may have to accept, being Chinese state-run companies, that any offer they make will need to be very, very attractive."