BEIJING, Jan. 26 (Xinhua) --Chinese regulators have become increasingly concerned about integration risks in domestic listed companies' overseas acquisition.
Chinese home appliance giant Haier has agreed to buy the appliances business of U.S. conglomerate GE for 5.4 billion U.S. dollars, Haier said on January 16.
The Shanghai Stock Exchange (SSE) issued an inquiry letter on Monday mainly focusing on how to deal with integration risks in assets, personnel, business and channels and questioning on intellectual property rights risks and asset pricing basis.
Given that the main business of GE appliances lies in the United States, while that of the Haier lies in China, the regulator has proposed several questions on integration risks of the plan, demanded that Haier should give tips on major risks of the acquisition and invited financial consultant to voice opinions.
The SSE questioned Haier on how to guarantee the stability of the underlying assets' original sales channel. Meanwhile, as the underlying assets are similar with Haier's original business, the SSE required Haier to disclose whether the move would hit a blow on its original overseas appliance business.
Moreover, the SSE asked Haier to illustrate the reasonability of theacquisition price and solicit financial consultant's opinions on this issue, as the Swedish company Electrolux once planned to buy the underlying assets for 3.3 billion U.S. dollars, which was much lower than that of the Haier's.
The SSE also required Haier to give a written response on other questions like intellectual property rights risks, necessity of the trading and loan risks before January 29, 2016.
Insiders noted that such potential integration risks would be common in Chinese enterprises' overseas acquisition. Hence, under the background of overseas acquisition boom, regulators would lay more emphasis on its regard. (Edited by Zhang Yuan, zhangyuan11@xinhua.org)
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