Sinopec receives Addax takeover approval

Amid a global economic downturn, we take good news where we can get it. With domestic stock markets not doing all that well – the Shanghai Composite Index hit a four-week low at its close yesterday – we turn to outbound investment for a bit of cheer. Champagne corks are no doubt flying over at Sinopec, which yesterday announced it had received confirmation from the National Development and Reform Commission that its US$7.5 billion takeover of Addax Petroleum would be approved. The deal will be the largest-ever takeover of a foreign company by a Chinese firm, and will certainly be watched closely by other Chinese companies hoping to invest in overseas resources. Finance has also been pegged as a sector likely to see increasing outbound investment activity, and today’s news brought a good example: China Construction Bank is buying AIG Finance, the Hong Kong subsidiary of AIG, for US$70 million. It’s the bank’s first overseas acquisition since 2006. Finally, sovereign-wealth fund China Investment Corp is in the news again, this time due to reports it is discussing a US$1 billion convertible bond deal with Australia’s Fortescue Metals. The bond issue would help Fortescue to triple its production.