The biggest ever takeover of a Chinese company has collapsed, and for once no one can blame the Chinese government.
Charles River, the US pharmaceutical company, announced a $1.6 billion takeover of Wuxi PharmaTech back on April 26.
The deal would have given Charles River drug-testing facilities in Shanghai, Suzhou and Tianjin, where cheap labour and lab costs are tempting big pharma companies.
Oddly, the Chinese government, which has a history of torpedoing any major foreign acquisitions of Chinese firms, kept silent throughout. This is particularly odd given that Wuxi PharmaTech is in precisely the sort of "key industry" that China tends to get protectionist about.
For a country that was prepared to block Coca Cola from buying Huiyuan, a juice maker, it seems a bit odd that hi-tech science companies are apparently freely available to buy.
This time, however, the deal failed because of shareholder pressure back home in the US. Jana Partners, a hedge fund that owned 7% of Charles River, complained loudly that the deal overvalued Wuxi and led a charge by other investors to topple the idea.
Charles River will now have to pay a $30 million break fee and the rest of us lose the chance to see whether this major deal would have actually got the go-ahead from the government.
Meanwhile, Diageo’s $952 million purchase of Sichuan Swellfun, the baijiu maker, remains the largest-ever announced foreign takeover in China.