Fosun Billionaire Backs China's Foreign M&A ClampdownBloomberg News
Government move is ‘necessary, timely,’ Guo writes in letter
Fosun is among Chinese firms being examined over acquisitions
Start your day with what's moving markets in Asia. Sign up here to receive our newsletter.
Billionaire Guo Guangchang, whose Fosun International Ltd. is under scrutiny by Chinese authorities over its foreign mergers and acquisitions, said the government’s clampdown on outbound investments is necessary to take to protect the economy.
"The recent scrutiny on overseas investments and financial irregularities are necessary, timely and can eradicate a lot of irrational investments," Guo said in a letter posted on Fosun’s official WeChat social-media account on Saturday. "If we don’t take some measures, foreigners will take us as ‘dumb people with a lot of money.’"
Fosun has been among a group of prolific acquirers -- including HNA Group Co., Dalian Wanda Group Co. and Anbang Insurance Group Co. -- that have slowed their pace of acquisitions as China stepped up its scrutiny of capital outflows and mounting debt. Amid pressure, Wanda earlier this month agreed to sell most of this theme park-related assets for $9.4 billion, and people familiar with the matter have said HNA has recently been facing challenges with a couple of its deals.
Still, acquisitions haven’t stopped. On Friday, Shanghai-based Fosun, whose businesses range from insurance to pharmaceuticals, said it agreed to team up with a state-backed dairy producer to buy French margarine maker St Hubert for 625 million euros ($732 million). HNA recently announced it will buy the operator of one of Brazil’s busiest airports.
"I believe the government’s attitude toward truthful, compliant overseas investments has never changed, and we have indeed felt government support for our projects," Guo said in his letter, which he wrote while on flight from Paris to Shanghai.
The tycoon also pledged to back Beijing’s Belt and Road initiative, citing Fosun’s investments in banking and insurance assets in Europe as a way the company is supporting the campaign.
— With assistance by Jing Yang De Morel