MNCs in the News-2017-12-01


The Delegations of German Industry and Commerce in China, which represents the Association of German Chamber of Industry and Commerce in China, “has warned that members of the Germany business community in China are concerned” about the request by the Chinese Communist Party (CCP) to set up cells in their companies,” potentially with an operational role, and that “‘it cannot be ruled out that German companies might retreat from the Chinese market or reconsider investment strategies’” (He Huifeng, “German Trade Body Warns Firms May Pull out of China over Communist Party Pressure,” South China Morning Post, November 29, 2017,

Following discussion by Chinese President Xi Jinping, a government advisor stated China’s State Council “will soon unveil plans for a ‘free-trade port’” in Shanghai that will “feature eased capital controls, no customs duties, and minimum clearance procedures.” It is supposed to represent an advance on the Shanghai Free Trade Zone (SFTZ), but in a smaller area that allows for more focused and meaningful reforms. There is much doubt whether anything meaningful actually will happen given the poor track record of the original SFTZ (“China to Unveil Shanghai Free-Trade Port ‘in Coming Months,” South China Morning Post, November 24, 2017,

Following IKEA’s initiation of a new round of chest and dresser recalls in North America, the Shanghai Administration of Quality and Technology Supervision reported it asked IKEA Group to “investigate product safety and consider a recall.” It specifically asked IKEA to “investigate if any of its products are faulty, to evaluate safety risks, and not to evade the responsibility of a recall.” IKEA already had undertaken a recall of chests and drawers in 2016 in North America and subsequently in China following regulatory pressure (“Shanghai Asks IKEA to Investigate Product Safety after US Recall,” China Daily, December 1, 2017,

China’s National Development and Reform Commission recently published rules which specified more than three dozen penalties that the government might impose if firms are “involved in illegal outbound investments or in moves to book profits by short-selling the yuan.” For instance, “enterprises involved in such behavior would not be allowed to purchase foreign exchange or make outbound investment.” Beijing also will look more closely at their domestic investment activities and cooperation with local governments. Information on suspect firms will be shared across different government supervisory agencies (Wang Yanfei, “China Aims to Curb Irrational Investment,” China Daily, November 29, 2017,


Japan’s Toshiba Corp. had hoped to sell its flash memory division for USD $18 billion to a consortium led by United States (US) Bain Capital. Continued legal action by its former partner, US Western Digital, has caused Toshiba to take Western Digital to court in Japan for USD $1.1 billion in damages the Japanese firm says have been incurred due to ongoing delays. The Tokyo District Court’s decision may finally allow Toshiba’s sale to proceed, though Western Digital maintains a US case against the sale (“Japanese court hears Toshiba, Western Digital fight on sale,” Japan Times, November 29, 2017,

In an effort to better compete against US online retailer Amazon, India’s Flipkart reached an agreement with Japan’s SoftBank Group for a USD $2.5 billion investment. The investment initially came under government scrutiny, but has since been approved by India’s anti-trust commission. SoftBank, through its Vision Fund, will hold a 20 percent stake in the Indian company which also has investment from US firms such as Tiger Global, eBay Inc., and Microsoft as well as China’s Tencent Holdings (Sankalp Phartiyal, “Flipkart investors, employees trimming stakes as part of SoftBank deal,” Reuters, November 30, 2017,

South Korea

Seoul and London have signed a memorandum of understanding to ease the approval process for South Korea’s Korea Electric Power Corporation (KEPCO) to acquire Britain’s NuGen and assume control of three nuclear power plants projects worth USD $18 billion. KEPCO’s anticipated acquisition of NuGen from Japan’s Toshiba Corp is part of the Korea and British governments’ commitment to cooperate on nuclear energy. Korea Hydro & Nuclear Power is also considering taking a stake in Britain’s Horizon New Clear Power at London’s request (Michael Herh, “Countdown Begins for Korea’s Landing Moorside Power Plant Order from UK,” BusinessKorea, November 29, 2017,

South Korea’s Hyundai Engineering & Construction Co. and POSCO Daewoo Corp. have signed an agreement with Uzbekistan’s state-owned energy provider, UzbekEnergo, and the State Committee of the Republic of Uzbekistan on Investments for a combined-cycle power plant and high-voltage power transmission and transformation line. The project, worth USD $1.8 billion, is part of Tashkent’s initiative to build large-scale combined-cycle power plants in the country to address power shortages and increase energy stability (Jung Min-hee, “Hyundai E&C, POSCO Daewoo Jointly Win Combined-cycle Power Plant Construction Deal,” BusinessKorea, November 24, 2017,


Indonesia’s Ministry of State-Owned Enterprises was supposed to facilitate the divestment of 51 percent of US mining company Freeport-McMoRan’s stake in Freeport Indonesia. However, no plans for Freeport-McMoRan’s return of Indonesia’s Grasberg mine have been finalized as the two parties continue to disagree about the mine’s valuation. Jakarta’s state-owned aluminum producer, PT Inalum, as well as several other state-owned mining firms have been tapped to acquire Freeport stakes, ensuring Indonesian firms will own a majority share in the Grasberg mine (Fergus Jensen and Wilda Asmarini, “Indonesia has ‘no clear structure’ for a Freeport deal yet,” Reuters, November 24, 2017,

Indonesia’s state-owned utility company Pembangkitan Kawa Bali (PJB) and United Arab Emirates’ (UAE) Abu Dhabi Future Energy (Masdar) agreed to build a 200-megawatt photovoltaic power plant worth USD $300 million. Masdar agreed to cooperate with PJB after Jakarta delivered several economic incentives such tax allowances to the UAE. The two companies plan to finish the world’s largest floating solar plant by 2020 and believe that the price per kilowatt-hour may be under USD $0.1 (Wilda Asmarini, “LNC Unit and UAE’s Masdar Plan World’s Largest Floating Solar Plant in Indonesia,” Jakarta Globe, November 28, 2017,


Bangkok has approved over USD $22.6 billion for infrastructure development projects in its Eastern Economic Corridor (EEC) and paved the way for more foreign investment projects to be approved. After Thailand’s National Legislative Assembly passes its Eastern Special Economic Zone Act, foreign companies such as BMW, Nissan, Minor Internationala, and Air Asia will be permitted to increase investment in the EEC region. Such companies align with the high-growth, heavy manufacturing focus that Bangkok has for its Eastern seaboard (Chalida Ekvitthayavechnukul, “Thai govt okays $22.6b infrastructure investment in EEC,” Deal Street Asia, November 25, 2017,

Thai construction company, TTCL Pcl, is moving forward with plans to build a USD $3 billion coal-fired power plant in Myanmar’s Kayin region despite intense international outrage over Myanmar’s abuse of its Rohingya minority group. While western companies have held off investment due to the ethnic violence, TTCL believes it would not suffer any reputational damage and plans to move ahead with the project after it receives approval from Myanmar’s electricity ministry. Seeing growth opportunities, TTCL hopes to build two more power plants in coming years (“Thai investments flow into Myanmar despite refugee flood,” Bangkok Post, November 28, 2017,


Malaysia’s central bank has approved China’s HNA Group to increase its ownership in a subsidiary of Germany’s Deutsche Bank after initial concerns about HNA’s non-transparent ownership structure, debt worries, and Beijing’s capital controls. HNA’s investment in Deutsche Bank Malaysia Bhd. Is the latest of a series of international investments by HNA in Deutsche Bank causing HNA to need approval from Europe’s Central Bank and Swiss takeover authorities before gaining more than 10 percent ownership in the Malaysian branch (Eyk Henning and Steven Arons, “Bank Negara green lights HNA stake in Deutsche Malaysian arm,” Deal Street Asia, November 24, 2017,


Foreign firms including Japan’s Asahi Group and Belgium’s AB Inbev are eagerly awaiting the sale of Vietnam’s state-owned brewer, Sabeco. Hanoi believes its sale of the brewing company will raise over USD $5 billion, but many foreign firms are wary of the 49 percent ownership ceiling which has not been removed. Sabeco may pave the way for other large government divestments in state-owned industries, which have been regularly delayed despite Hanoi plan to relax foreign ownership limits (Mai Nguyen, “Vietnam eyes $5 billion from majority stake sale in brewer Sabeco,” Reuters, November 29, 2017,

Foreign mergers and acquisitions (M&As) of Vietnamese business entities are on the rise with investors from Singapore, Japan, South Korea, and Hong Kong expanding into Vietnam’s consumption, retail, production, and finance industries. Thai investors have also made headlines acquiring major Vietnamese businesses including Metro, BigC, and Nguyen Kim. The M&A spree has been a result of Hanoi increasing foreign ownership limits and moving to privatize state-owned enterprises. For investors, governments, such as South Korea’s, are moving to prioritize funding and approval for M&A deals in Vietnam’s growing economy (“M&A in Vietnam – Attractive investment channel,” Vietnamnet, November 28, 2017,

*The information compiled in the MNCs in the News digest is gathered from sources believed to be reliable, but the Wong MNC Center does not guarantee their accuracy. The content of the MNCs in the News digest does not necessarily represent the view of the Wong MNC Center, its Board of Directors, or its Advisory Board, but is intended for the non-commercial use of readers in order to foster debate and discussion and to facilitate and stimulate research.