China's government flexes muscles with Uber, DreamWorks probes

Fri Sep 2, 2016 4:21pm EDT
 
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By Adam Jourdan and Michelle Price

SHANGHAI/HONG KONG (Reuters) - The Chinese government said on Friday it was investigating two high-profile takeover proposals involving U.S. companies, the latest sign of its growing influence on whether deals are approved - even those appearing to have little impact in China.

The Commerce Ministry said at a briefing on Friday it was probing ride-hailing giant Didi Chuxing's planned acquisition of U.S. rival Uber Technologies Inc's UBER.UL China unit and Comcast Corp's (CMCSA.O: Quote) purchase of movie studio DreamWorks Animation.

The scrutiny, announced the day before world leaders descend on China's eastern city of Hangzhou for a meeting of the Group of 20, underscores the ministry's increasingly tough stance on companies that strike deals without seeking its approval.

The Chinese are increasingly using their regulatory might to gain influence in the global economy, according to one expert in international relations.

"DreamWorks and Comcast barely touch China, but it's a way to assert their new position in the world. They want to remind us, 'We're big and you have to pay attention to us,'" said Jim Lewis, of Washington’s Center for Strategic and International Studies think tank.

A representative of the U.S. Department of State declined comment and referred queries to China's Commerce Ministry.

There had not been a filing for the Didi-Uber deal, the ministry said last month. Comcast already said it had completed the deal for DreamWorks, which may indicate it did not think it needed to wait for Chinese approval.

The ministry requires companies to notify it of transactions before they close if those merging have combined global turnover in the previous year exceeding 10 billion yuan ($1.5 billion) or their combined China income exceeds 2 billion yuan ($300 million).   Continued...

 
The logo of Didi Chuxing is seen at its headquarters in Beijing, China, May 18, 2016. REUTERS/Kim Kyung-Hoon/File Photo - RTX2GOMR