MNCs in the News-2018-04-06


China has become very active in reviewing cross-border mergers and acquisitions (M&A) and enforcing market competition rules against foreign firms, which is noteworthy because, according to some, its “competition rules have increasingly become a key lever for it to influence global industries in which its so-called ‘national champions’ take part.” Specifically, it seems to be imposing deal conditions and anti-trust fines that favor its companies and/or discriminate against foreign companies. The upcoming merger of China’s three competition authorities into a single body should further strengthen competition policy (Henny Sender, “China’s Antitrust Regime Comes of Age,” Financial Times, April 1, 2018)


It has been learned when the Committee on Foreign Investment in the United States (CFIUS) approved Japan’s SoftBank’s USD $3.3 billion acquisition of Fortress Investment Group last year it forced SoftBank to “relinquish day-to-day control” of Fortress. Some expected an easier route for Softbank given its pledge to invest $50 billion in the United States (US) during Donald Trump’s presidential campaign. The case reveals the impact the Administration’s cool stance towards foreign acquirers is having on their efforts to invest in the US (Arash Massoudi, “SoftBank waived day-to-day control of Fortress to win deal,” Financial Times, April 4, 2018,

Japan’s Toshiba Corp. missed the March deadline to sell its USD $19 billion flash memory division due to complications with China’s anti-trust regulators. Those familiar with the deal report China’s Ministry of Commence is concerned with South Korea’s SK Hynix holding a large stake in the business. The ministry could require Toshiba to maintain fixed prices or split its hard drive and chip division. Toshiba announced plans to complete the deal despite setbacks (“Toshiba set to miss deadline on ¥2 trillion chip sale, pushing back Bain Capital deal by at least a month,” The Japan Times, March 30, 2018,

South Korea

South Korea’s Kumho Tire is preparing to finalize sale agreements with China’s Qingdao Doublestar following the Kumho union’s vote on the sale. Specifically, workers agreed to several business stabilization measures including wage freezes and benefit reductions. Qingdao agreed to maintain its Kuhmo shares for at least three years and remain the largest shareholder for five. To ease lingering union concerns, State-owned Korean Development Bank pledged to track Doublestar’s business operations to ensure the Chinese company will not preemptively exit its holdings, steal technology, or enter unsavory deals (Jung Min-hee, “Qingdao Doublestar to Acquire Kumho Tire,” BusinessKorea, April 2, 2018,

Lotte Group, a South Korean retailer, reaffirmed its decision to exit most of its Chinese operations after China’s State Councillor Yang Jiechi announced “China will support the smooth sales of Lotte Mart’s Chinese stores.” Lotte Group previously failed to secure a buyer for its struggling Chinese operations due to pressure from Beijing. With the Chinese government’s support and warming Sino-Korean relations, Lotte is negotiating with several potential buyers. Industry insiders suspect the South Korean company will not fully exit the market (Nam Hyun-woo, “To exit or not? Lotte mulls over China mart sale,” The Korea Times, April 2, 2018,


Turkey’s Hitay Holdings reiterated its pledge to develop a USD $1 billion geothermal power plant in Indonesia’s Aceh province. The planned 220-megawatt geothermal power plant will consist of six well sites. Both Hitay holdings and the Aceh provincial government are currently awaiting approval from Jakarta’s Energy and Mineral Resources Ministry. Aceh officials also invited Hitay to invest in other industries and consider putting money into its Arun special economic zone (“Turkish firm Hitay Holdings to invest US$1 billion in Aceh geothermal power plant,” The Jakarta Post, April 4, 2018,

To advance Indonesian President Joko Widodo’s campaign to attract foreign businesses Indonesia’s investment board announced the removal of foreign capital restrictions on investment in university and other educational ventures. The Widodo Administration will allow 100 percent foreign ownership after previously barring any outside investment into the university sector unless done in collaboration with a local entity. While the legislation could boost the country’s lagging education quality, it also tracks with Jakarta’s plan to revise foreign ownership rules in sectors currently restricting foreign investment (Tabita Diela, “Indonesia to Open University Sector to 100% Foreign Ownership,” Jakarta Globe, April 5, 2018,


Thai sugar manufacturer Mitr Phol and coal distributer Energy Earth PCL are the first Thai companies to receive criticism about their overseas investments. Mitr Phol stands accused of displacing over 600 families in Cambodia’s Oddar Meanchey province and taking land without offering compensation. Energy Earth’s Ban Chaung coal mine in Myanmar is causing severe damage to the local environment and people. International human rights groups are pressing the Thai government to prevent other human rights violations and allow for swift compensation (Pratch Rujivanarom, “Two Thai companies face flak over practices in Cambodia and Myanmar,” The Nation, April 5, 2018,


Malaysia announced it plans to evaluate US based Uber’s move to sell its Southeast Asian operations to Singapore’s Grab. Kuala Lumpur wants to make sure the planned sale will not disrupt market competition. Government officials are prepared to utilize the country’s Competition Act in the event they feel Grab is abusing its enhanced market position. In response, the Singaporean firm stated it does not currently plan to raise fees and the acquisition will add to “the vibrant and competitive ride-hailing, delivery and transportation spaces” (“Philippines, Malaysia put Uber-Grab deal under anti-competition scrutiny,” New Straits Times Online, April 3, 2018,

Malaysia’s state-owned energy utility company Tenaga Nasional has secured USD $168.77 million to refinance its 80 percent stake in two United Kingdom (UK) wind energy companies. The refinancing will support Tenaga’s plans to inject new capital into the renewable energy sector. Tenaga’s acquisitions of GVO Wing and Bluemerang Capital earlier this year are its first forays into the UK’s wind sector. Tenaga’s purchases are attractive due to London’s government-backed feed-in-tariff program and guaranteed export tariff to buy renewable energy (Gho Chee Yuan and Jason Ng, “Tenaga Nasional secures 120 million pound financing facility,” Nikkei Asian Review, April 2, 2018,


Foreign entities contributing capital and purchasing shares in Vietnamese businesses totaled USD $1.89 billion in the first quarter, up 121 percent over the same period last year. The increase stems from Vietnam’s increasingly open investment environment and the ability of foreigners to invest without an investment license such as is needed for investment projects. To utilize increasing capital, Hanoi is working with the World Bank to focus on investment strategies which utilize advantages foreign firms bring to the country and prioritize its manufacturing, services, agriculture and travel sectors (“Foreigners keen on investing in Vietnam,” Vietnamnet Bridge, April 4, 2018,

*The information used herein is gathered from sources believed to be reliable, but the Wong MNC Center does not guarantee their accuracy. The content in this section does not necessarily represent the official view of the Wong MNC Center, its Board of Directors, or its Advisory Board.