Sinotruk Drops U.S. Investment Plan After Regulatory Red Light
* The blocked deal reflects stiffening challenges facing Chinese companies seeking to invest in the U.S.
* A shadow fell over the deal in March after CFIUS said it would extend its review.
The Chinese state-owned truck maker Sinotruk is backing away from its plan to take a controlling interest in an American supplier of electric-vehicle propulsion systems after U.S. regulators flashed a red light.
The U.S. Committee on Foreign Investment in the United States (CFIUS), which oversees foreign investment in American companies, said it probably wouldn’t approve Sinotruk’s proposal to invest $28 million in a 34% stake in UQM Technologies Inc., according to Longmont, Colorado-based UQM.
UQM and China National Heavy Duty Truck Group Co., the formal name of Sinotruk, agreed to jointly explore other options for bringing UQM into China’s burgeoning new energy vehicle market, UQM said in a statement.
Sinotruk holds a 9.9% interest in the U.S. company and remains its largest shareholder. UQM shares fell 9% Thursday on the NYSE American Stock Exchange.
The blocked deal reflects stiffening challenges facing Chinese companies seeking to invest in the U.S. amid rising trade tensions. Earlier this month, Chinese conglomerate HNA Group abandoned a bid to buy a majority stake in the U.S. hedge fund SkyBridge Capital, citing pressure from CFIUS.
In February, American semiconductor and electronics manufacturer Xcerra Corp. and China’s Hubei Xinyan Equity Investment Partnership canceled a proposed $580 million merger after failing to get national security clearance. The same month, U.S. securities regulators vetoed the planned purchase of the Chicago Stock Exchange by a Chinese buyer, killing a deal that had dragged on for nearly two years. And in January, Ant Financial Services Group, the fintech affiliate of Alibaba Group, dropped its plan to take over U.S. money transfer service provider MoneyGram.
Sinotruk and UQM signed an agreement for the equity purchase in August last year. Sinotruk completed the first batch of purchase of 9.9% of the U.S. company in September but has since awaited regulatory clearance to raise its stake. A shadow fell over the deal in March after CFIUS said it would extend its review.
“We have not been able to come up with a resolution that satisfies the committee’s concerns” regarding the investment, said Joe Mitchell, president and CEO of UQM. The companies will continue the partnership to jointly develop business in China, Mitchell said.
In November, Sinotruk and UQM signed an agreement to set up a joint venture in Qingdao, Shandong province, to produce electric-powered commercial vehicles and auto parts.
Founded in 1967, UQM produces propulsion systems for hybrid, plug-in hybrid, fully electric and fuel cell vehicles, as well as power generation and marine applications, according to its website. Other customers include BMW, Caterpillar, General Motors and John Deere, according to the website.
Contact reporter Han Wei (email@example.com)
Dec 01 06:42 PM
Dec 01 05:16 PM
Dec 01 12:23 PM
Dec 01 11:57 AM
Nov 30 06:34 PM
Nov 30 05:59 PM
Nov 30 05:39 PM
Nov 30 03:06 PM
Nov 30 02:16 PM
Nov 30 01:18 PM
Nov 27 07:07 PM
Nov 27 07:03 PM
Nov 27 05:24 PM
Nov 27 05:13 PM
Nov 27 05:03 PM
- 1Ant Group Cleared to Sell $3 Billion of Asset-Backed Securities
- 2Gallery: Chinese Fans Mourn Soccer Legend Diego Maradona
- 3Gallery: Smart Trash Cans and Delivery-Bots on Show at Internet Expo
- 4China Tightens Rules for Scandal-Hit Trust Sector Amid Campaign to Contain Risks
- 5Hong Kong to Create 2,000 Jobs for Local Youth in Greater Bay Area
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas