China Luoyang International Robot And Intelligent Equipment Exhibition Opens (Photo : Getty Images)
The first quarter of 2017 would be over in about two weeks, but since the start of the year, less than $2 billion in overseas acquisition have been completed by Chinese companies. The situation contrasts with 2016 when Chinese conglomerates snapped up Hollywood entertainment assets and established record-high buy-in.
Lowest Quarterly Tally
Because of the vise created by regulators in Beijing and Washington, there is not just one but two sets of barriers for cross-Pacific dealmaking, Chris Fenton, trustee of the US-Asia Institute, said. As a result, Bloomberg forecasts Q1 2017 would likely be the lowest quarterly tally in eight years.
Just last week, the planned $1-billion purchase by Dalian Wanda Group of Dick Clark Productions from Elridge Industries fizzled as Elridge terminated the deal after Dalian Wanda backed out of the offer to purchase the producer of the Grammy Awards. Elridge sought from a Delaware court to recover an unspecified breakup fee it believes Dalian Wanda owes the company.
It would have been Dalian Wanda Group’s first TV venture outside China. The acquisition was supposed to close by the end of February, but the two parties were talking of extending the deal until the end of March. However, a personal privy to the deal said that Dalian Wanda was not willing or not able to make a reasonable proposal for an extension, CNN Money reported.
2 Barriers
The barriers come from both American and Chinese authorities. From the U.S. side, legislators are worried over the influence that Chinese companies would have on Hollywood content after Chinese company snap up Legendary Pictures and other movie production houses. From China’s side, regulators are monitoring the flow of money to outside the country.
As a result, an agreement between Paramount and two Chinese firms – Shanghai Film Group and Huahua Media – to a co-financing deal made in early 2017 is encountering problems with transfer of funds. Paramount Pictures of Viacom funded in the past big-budget movies such as “Mission: Impossible” and “Transformers.”
