Carlyle clears China deal hurdle

Carlyle, a US private equity group, has received approval from the State-owned Assets Supervision and Administration Commission (Sasac) to take a 50% stake in Xugong Construction Machinery, the <i>Financial Times</i> reported, citing a person familiar with the situation. The company still needs approval from the Ministry of Commerce and the stock market regulator before the deal can go ahead. The group's effort to acquire a stake in the leading Chinese construction equipment company has been caught up in a backlash over foreign investment in the Chinese economy. Carlyle announced last October that it had agreed to pay US$375 million for an 85% stake in the listed company, whose parent group is controlled by the local government of Xuzhou city in Jiangsu province. In a bid to overcome political resistance, Carlyle and Xugong changed the terms of the deal in October to make it a joint venture.