China firms pitch big M&A break-up fees, minority stakes to allay US regulatory fears

Hong Kong

CHINESE companies are offering to pay record break-up fees and are willing to settle for minority stakes in US mergers and acquisitions (M&As) in an attempt to assuage concerns of potential overseas partners about regulatory snags scuttling the deals.

The unprecedented concessions come as China pursues record M&As abroad to offset slowing economic growth at home and a weakening currency. They also come as US scrutiny of Chinese-initiated M&A remains high, making its partners uneasy and forcing several deals to be abandoned. "These are unusual behaviours and just show that the Chinese want to get the deals done," said one Hong Kong-based technology banker, who declined to be identified because the person was not authorised to speak to the media.