Nisha Gopalan is a Bloomberg Gadfly columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.

It appears the protectionist tide has officially turned on China's offshore buying binge. Under Donald Trump's administration, Chinese acquisitions of U.S. companies and those elsewhere are getting knocked back at an alarming rate. No wonder the outlook for M&A bankers looks bleak.

While Beijing's crackdown on debt-fueled conglomerates is a few months old, the U.S. push back is just heating up. It could be that China National Chemical Corp.'s $43 billion takeover of Syngenta AG is one of the few mega-transactions that gets the green light this year. Mainland bids for the Chicago Stock Exchange and Cleveland's Aleris Corp. look shaky and may join HNA Group Co.'s $416 million tilt at a North American in-flight entertainment provider on the scrap heap.

Going to America
Chinese companies announced a record amount of U.S. acquisitions last year but deals have slumped in 2017
Source: Bloomberg

The U.S. Securities and Exchange Commission this week delayed a decision on whether to approve the China-led purchase of the Chicago Stock Exchange. It's indicative of the tightened scrutiny by U.S. regulators for several reasons. For one, SEC Chairman Jay Clayton overrode his staff's recommendation to proceed with the sale, even though at $27 million, it's tiny; and two, that was despite the Committee on Foreign Investment in the U.S., or CFIUS, giving it the go-ahead in December.

U.S. aluminum-product maker Aleris also looks unlikely to change hands. Aleris and Zhongwang USA LLC withdrew a notice seeking approval of the transaction from CFIUS, with Aleris saying in a filing Wednesday there can be "no assurance" the deal will be approved, leaving it in limbo. With Zhongwang's parent under investigation by the Commerce Department for shipping metal through third countries to avoid U.S. import tariffs, any chance of success seems slim.

Those setbacks threaten to imperil other deals that are awaiting CFIUS's good graces. They include: Alibaba Group Holding Ltd. affiliate Ant Financial's purchase of MoneyGram International Inc., which has been refiled once already; China Oceanwide Holdings Ltd.'s bid for insurer Genworth Financial Inc.; China-backed Canyon Bridge Capital Partners Inc.'s $1.3 billion offer for U.S. chipmaker Lattice Semiconductor Corp. (both of those have already refiled twice); and last but not least, Anthony Scaramucci's plan to sell his stake in SkyBridge Capital to HNA.

As GSR Capital discovered last year when its bid to buy Royal Philips NV's Lumileds unit was blocked by the Treasury Department panel, acquiring companies outside of the U.S. doesn't guarantee you a get-out-of-CFIUS card, either. Its bid for Nissan Motor Co.'s battery business is another one that's joining the queue this year.

Homeward Bound
Citic Securities was the top adviser on Chinese domestic M&A this year
Source: Bloomberg
Note: Data ranks brokerages by deal volume.

For M&A bankers, there is some light at the end of this tunnel. Domestic China deals should pick up as former high flyers like Dalian Wanda Group Co. sell assets. Large state-owned enterprises will also become even larger in the name of SOE reform.

Unfortunately, however, a lot of those local deals don't involve investment bankers and when they do, they tend to be the bailiwick of Chinese brokerages rather than Wall Street firms whose bread and butter is often cross-border transactions. Much of the time, international banks' participation in domestic deals comes down to supplying "fairness opinions," which are less lucrative.

CFIUS has never been the most transparent of bodies, but one thing is clear: China's global shopping binge is facing an ever-stronger U.S. policeman.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

  1. Refiling gives an acquirer another 75 days to complete the national security review and resolve any issues.

To contact the author of this story:
Nisha Gopalan in Hong Kong at

To contact the editor responsible for this story:
Katrina Nicholas at