Officials debate Carlyle-Xugong takeover
3 August 2006
Senior government officials held a three-day meeting to determine the fate of a controversial takeover deal of Xugong Construction Machinery by Carlyle Group, the US private equity firm, the Financial Times reported. The meeting, which involved bureaucrats from six departments including the Ministry of Commerce and the China Securities Regulatory Commission, is believed to be the first of its kind in China to deal with a corporate takeover, and comes as Beijing faces intense domestic pressure to block foreign investment in strategic industries. Debate has been raging since Carlyle agreed last October, after a public 12-month auction arranged by the provincial government of Jiangsu, to pay US$375 million for an 85% stake in the company, which leads the sector with annual sales of US$2.1 billion.