Bottom line: Rumors that Baidu may be planning to merge its take-out dining and group buying units with Meituan-Dianping are consistent with recent market trends, but are less likely to be true due to Baidu’s strong denial.
Baidu denies merger plan for group buying, dining units
I normally try to avoid writing about rumors that lack strong foundation, but the latest gossip about a potential new mega tie-up between 2 non-core units of online search leader Baidu(Nasdaq: BIDU) and group buying giant Meituan-Dianping look too spicy to ignore. Baidu came out with a statement late on Tuesday denying any talks were taking place to combine its take-out dining and Nuomi group buying services with Meituan-Dianping. But that said, any veteran China watcher will know that companies frequently deny such rumors even when they’re true. Read Full Post…
The following press releases and news reports about China companies were carried on September 7. To view a full article or story, click on the link next to the headline.
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Meituan-Dianping in Rumored Merger Talks with Baidu’s Nuomi, Dining Service (Chinese article)
Ctrip.com Proposes Offering of $750 Mln Convertible Senior Notes (PRNewswire)
China’s Online Chatter Muted Ahead of Apple (Nasdaq: AAPL) iPhone 7 Launch (English article)
Didi Chuxing Raises Shunfeng Car Service Prices 20-50 Pct in Some Cities (Chinese article)
Bottom line: The antitrust regulator’s decision to review Didi’s proposed union with Uber China marks the start of a new era of much-needed government oversight of major Internet mergers.
Antitrust regulator starts review of Didi-Uber union
After years of turning a blind eye to rapid consolidation in many emerging high-tech industries, China’s anti-trust regulator has finally adopted a more active posture with its recent decision to review the proposed landmark merger of homegrown car services firm Didi Chuxing with the Chinese unit of US rival Uber. The announcement by the Ministry of Commerce that the deal would require its approval caught Didi and Uber by surprise, since such a review would be the first for a major Internet deal since China rolled out its anti-monopoly law 8 years ago. Read Full Post…
Bottom line: New quarterly earnings data show that China’s travel industry is on the cusp of a slowdown likely to last for at least the next 2 years, while a major new fund set up by Ctrip shows the sector still has strong longer-term growth potential.
Ctrip-backed Ocean Link launches $400 mln travel fund
A couple of items from the travel space are casting a spotlight on the risks and rewards of China’s travel sector, which has huge potential but is also susceptible to economic cycles. Highlighting the big potential is word of a new $400 million fund being launched by leading online travel agent Ctrip (Nasdaq: CTRP) and US private equity firm General Atlantic to invest in Chinese travel-related projects. Meantime, the downside was showing up in the newest results of BTG Hotels (Shanghai: 600258), whose first-half profit plunged after its recent buyout of budget hotel specialist Homeinns. Read Full Post…
The following press releases and news reports about China companies were carried on August 30. To view a full article or story, click on the link next to the headline.
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Microsoft’s (Nasdaq: MSFT) MSN China Portal in Management-Led Buyout (Chinese article)
Russo Bros in Talks With Huayi Bros (Shenzhen: 300027) for Partnership (English article)
Baoneng (Shenzhen: 000690) Pays 882 Mln Yuan for 26.4 Pct of Dating Site Baihe (Chinese article)
Minsheng Bank (HKEx: 1988) Announces Interim Results (HKEx announcement)
Private-Equity Firm General Atlantic, Ctrip (Nasdaq: CTRP) in New $400 Mln Fund (English article)
Bottom line: China’s anti-trust regulator’s assertion that the Didi-Uber China mega-merger will require its approval could mark the beginning of a new, tougher stance towards the nation’s rapidly consolidating Internet sector.
Anti-trust regulator steps into Didi-Uber marriage
After years of sitting by and doing almost nothing to stop the formation of near monopolies in a number of emerging high-tech sectors, China’s anti-trust regulator may finally be taking notice of rapid consolidation happening in the country’s cyber realm. I’ve frequently complained that China’s commerce ministry has taken a relatively tough position on cross-border M&A for anti-competitive reviews, but pays little or no attention to similar domestic deals that could have similar effects for local consumers. But perhaps that may finally be changing, with word that the Ministry of Commerce is saying its blessing will be necessary for the newly announced mega-marriage between private car services giants Didi Chuxing and the China unit of global leader Uber. Read Full Post…
Bottom line: Qunar looks like the latest Chinese buyout candidate to become involved in a contested bidding war, while Autohome is unlikely to succeed in efforts to stop the sale of a stake in the company by its largest shareholder.
Qunar gets surprise buyout offer
A flurry of headlines from the wave of privatizations by US-listed Chinese companies are in the news as the week winds down, led by word that online travel site Qunar (Nasdaq: QUNR) has become the latest to get a buyout offer. Qunar wasn’t the only one lining up to leave New York, as game specialist Sky-mobi (Nasdaq: MOBI) also announced its own plan to go private. Meantime, a hotly contested privatization by online car specialist Autohome (NYSE: ATHM) has taken a few new twists, and wind power equipment maker Ming Yang (NYSE: MY) says it has just completed its own previously announced privatization. Read Full Post…
The following press releases and news reports about China companies were carried on June 16. To view a full article or story, click on the link next to the headline.
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Bottom line: Dalian Wanda’s de-listing plan from Hong Kong is likely to succeed, while eLong could re-list in China and become the travel services provider for WeChat following its New York privatization.
Dalian Wanda joins homeward migration
A trio of new headlines are part of the recent homeward migration of offshore-listed Chinese companies, led by a highly anticipated $4.4 billion offer to privatize property giant Dalian Wanda (HKEx: 3699). Also making news is faded online travel agent eLong (Nasdaq: LONG), whose shareholders have just approved a privatization that will soon end its 12-year-old listing in New York. Finally there’s film production house Yongle Film and Television, which would have been a strong New York IPO candidate in a earlier era but is now in the process of making a backdoor listing in Shenzhen. Read Full Post…
Bottom line: Ctrip’s new alliance with China Eastern continues its strategy of using equity tie-ups to further cement its position as China’s dominant provider of travel products and services.
Ctrip ties with China Eastern
In what looks like a first for private sector Chinese companies, leading online travel agent Ctrip (Nasdaq: CTRP) has just announced it will invest 3 billion yuan ($460 million) in China Eastern (HKEx: 670; Shanghai: 600115; NYSE: CEA) as part of a new strategic tie up with one of the nation’s top 3 airlines. The deal comes less than a year after US giant Delta Air Lines (NYSE: DAL) invested a similar amount in the Chinese carrier, and provides an important ally for Ctrip with one of its major suppliers.
This deal also comes as Ctrip’s former foe and new ally Qunar (Nasdaq: QUNR) remains locked in its own battle with China’s major airlines in a separate dispute tied to unruly third-party travel agents on its open platform. (previous post) Unlike Ctrip, which sells most of its plane tickets directly to travelers, Qunar’s open platform is home to hundreds of third-party travel agents who are harder to control and sometimes engage in deceptive practices when selling their products and services. As a result, many airlines have recently stopped allowing the sale of their tickets on Qunar’s website. Read Full Post…
Bottom line: Baidu’s spin-off of its professional video service continues its plan to separate newer loss-making units from its core search business, and could fuel strong profit acceleration for the New York-listed company by year end.
Baidu break-up continues with video unit spin-off
The slow motion break-up of online search leader Baidu (Nasdaq: BIDU) marches on, with word that the company is spinning off its professional video service into a separate company. The move will see the service, Baidu Video, receive 1 billion yuan ($150 million) in new investment as it takes on 2 more partners.
This particular move comes just a week after Baidu detailed a major corporate reorganization that was also aimed at separating out its older and highly profitable search services from its newer businesses, most of those losing big money. (previous post) As a relatively neutral observer, I have to say this particular strategy looks smart as it will help investors see more clearly how Baidu’s different businesses are doing and invest in ones where they see the best potential. Read Full Post…
