China Merchants Opens in U.S.; Kirin Buys National Foods; Private Equity Up "Down-Under"
China Merchants Bank (CIHHF), the sixth-largest lender in China, has been given the green light by the U.S. Federal Reserve to open for business in the United States. China had been pressuring the United States government to allow Chinese banks to enter the country, saying that it would reciprocate by permitting international investors to take greater stakes in banks in mainland China if U.S. regulators would grant the approval here. In a recent interview with the Financial Times, the chairman of the China Banking Regulatory Commission said "bilateral cooperation is very important if we want to broaden our market entry policies and open the door much wider." China Merchants Bank is expected to engage in wholesale deposit taking, lending, trade finance, and other banking services, according to the news release from the Federal Reserve. An application from another Chinese bank, the Industrial and Commercial bank Of China Ltd. (IDCBF), is still awaiting approval.
Kirin Holdings Co. Ltd., (KNBWY) of Tokyo announced yesterday (Thursday) that it is buying Australian dairy and beverage company National Foods Ltd. from its parent company, San Miguel Corp. (SMGBF) of Manila for $2.6 billion. National Foods holds 16% of the domestic milk market in Australia, including the second most popular drink in the country, Pura milk. It also has the Australian rights to the Yoplait Yogurt brand. In a company statement, Kirin said it would "obtain a new growth opportunity in the Australian dairy products, beverages and specialty cheese business. By adding National Foods strong brands to its product portfolio, Kirin is laying the strong business foundations in the field of food and health business in Asia and Oceania."
The level of private equity deals in the Asia Pacific region reached an all time in September according to a report released Thursday by Thompson Financial. Twenty deals were completed in the month with a total value of $6.5 billion, up from $6.1 billion. A large portion of the increased volume in October was in Australia; including the largest deal of the month. Canadian asset manager Brookfield Asset Management (BAM) purchased the construction and property firm Multiplex Group for a price tag of $4.2 billion. Deals in the region have totaled $55.4 billion so far this year, up 55.4 % increase from a year ago. In stark contrast, the pace of private equity deals in the United States and Europe have declined in volume as a result of the credit crisis sparked by U.S. mortgage defaults and more-stringent financing requirements. As a result, U.S. private-equity funds have been looking to Asia and to the Pacific Region for better investment opportunities.