German angst over Chinese M&A

Kuka’s robotic arms are a familiar sight on assembly lines, like this Mercedes-Benz plant in Germany, but the majority Chinese-owned company wants to expand beyond the factory

 

Germany is a top target in China’s search for innovative engineering groups — but some see a threat

At this year’s Hannover Messe, the world’s biggest industrial fair, it was one of the stars of the show: an elegant, ultra-sensitive robot known as an Iiwa that can pour a beer and brew a cup of coffee.

Angela Merkel and Barack Obama, guests of honour on the Messe’s opening day, were intrigued. “Can it squeeze lemons?” the German chancellor asked.

The Iiwa — or intelligent industrial work assistant — is produced by Kuka, one of Germany’s most innovative engineering companies. But it will not be entirely German for long. Less than a month after the fair, a Chinese appliance-maker called Midea offered to buy Kuka for €4.5bn, in the largest ever Chinese takeover of a German company.

‘No one has the guts to sell submarines to Taiwan’ as China pressures Pentagon

The Obama administration is backing away from a 2001 commitment to help Taiwan acquire submarines to defend the island from Chinese attack.

The Pentagon, in particular, is said to oppose the 13-year-old plan to help Taipei buy or build eight diesel electric subs over concerns of disrupting its high-priority military exchange program with China.

The Chinese military cut ties to the Pentagon several times in recent years to protest U.S. arms sales to Taiwan, and agreed to resume exchanges only if the administration adopted China’s concept of “new-type” relations that, for Beijing, includes gradually ending arms sales to Taiwan.

The administration, however, is bound by the 1979 Taiwan Relations Act to provide defensive arms to Taiwan to prevent a Chinese takeover.

Fed clears China’s first US bank takeover

Just days after high-level US-China economic talks in Beijing, the Federal Reserve approved an application from Industrial and Commercial Bank of China to buy a majority stake in the US subsidiary of Bank of East Asia.

The transaction will make ICBC the first Chinese state-controlled bank to acquire retail bank branches in the United States.

ICBC has been the most aggressive of China’s “big four” banks in expanding overseas.

According to the Fed the bank has total assets of roughly $2.5 trillion.

It will buy up to 80 percent of the US unit of the Hong Kong-based Bank of East Asia, which operates 13 branches in New York and California.

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The broad expansion of China’s footprint in the US market comes amid a series of financial reforms in China that could begin to open the lucrative market to US firms.

Full article: Fed clears China’s first US bank takeover (Yahoo!)