Beijing Vetoes Tengzhong-Hummer Deal

Another failed deal has caught our attention this week. Beijing's decision to veto Tengzhong's acquisition of Hummer, which CFW forecast in 'Beijing Threatens Tengzhong-Hummer deal', CFW, 15 February 2010, testifies to the selectivity of Chinese authorities when it comes to outbound M&A. While the strategic rationale behind selectivity of inbound M&A is clearcut (see Beijing veto of Coca Cola's acquisition of famous local brand Huiyan Juice), outbound M&A has become the key channel of Chinese asset expansion, thereby justifying official discretion. Beijing's selectivity of outbound M&A acts as a screen before an M&A faces the scrutiny of Western, especially US,

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