Carlyle China deal expected to win approval
Shenzhen (China), Apr 8: U.S. buyout fund Carlyle Group's 5 million takeover of China's largest construction machinery firm is expected to win regulatory approval because Carlyle intends to list the company, a person familiar with the deal said on Saturday.
Carlyle's October agreement to buy Xugong Group Construction Machinery Co. Ltd. -- China's largest-ever private equity deal -- was reported to be stalled by an attempt by Chinese authorities to impose strict conditions on Carlyle.
China has resisted allowing foreign companies to take over leading companies in key sectors.
But the source said the deal is likely to get the go-ahead as Carlyle plans eventually to sell Xugong in an initial public offering -- apparently ruling out a sale to a competitor.
Such a pledge would be an unusual step as private equity firms, which tend to hold their assets for three to five years, prefer to keep all of their exit opportunities open.
A spokeswoman for Washington-based Carlyle declined to comment on the deal.