Amid the increasing trend of a clampdown on large business deals in China, US investment firm Blackstone Group is dropping its USD 3 billion bid for a controlling stake in property giant Soho China.
The New York-based investment management firm said it decided to drop the deal "in light of the lack of sufficient progress" being made among government regulators who would need to approve the deal, CNN reported.
Back in June, Blackstone had announced the agreement, bidding roughly 30 per cent above Soho China's stock price at the time. Despite scrapping the deal, the company didn't offer further details.
As per the CNN report, Blackstone has made big real estate investments in China, including a majority stake in a large logistics park in Southern China's Greater Bay Area.
The billion-dollar deal between Blackstone Group and Soho China has been dropped at a time when China is going hard on large business deals. Being has promised to strengthen rules that would combat monopolistic behaviour and regulate technological innovation.
Moreover, Chinese authorities also called on law enforcement to take action in areas of "vital interests of people," including financial services, education and tutoring.
Experts believe that China may soon face financial contagion as the country's property developers' loans are surging due to the communist regime's recent crackdown. Beijing's crackdown on overextended property developers has led to a surge in loan losses. And it has also raised fears of contagion across the nation's USD 50 trillion financial sector, Nikkei Asia reported.
( With inputs from ANI )
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