Beijing buys into US private equity firm

21-05-2007

Beijing buys into US private equity firm
China's nascent state investment company has bought a ten per cent stake in US private equity group Blackstone for $3 billion (£1.52 billion).

Beijing will hold its stake for at least four years under the terms of the deal but the move is likely to face opposition stateside, with Washington previously against China acquiring interest in US firms.

The fact that the communist government's own investment company has spent $3 billion on a private equity firm is indicative of the sector's growth in recent years.

Blackstone in turn will gain a potentially lucrative foothold in China, with Beijing also traditionally restrictive in allowing western investment within its own borders.

"We are very pleased to be able to make the state investment company's very first investment in such a well-respected firm as Blackstone," said Lou Jiwei, head of the state company's working group in the Chinese capital.

Stephen Schwarzman, chairman, chief executive officer and co-founder of Blackstone, added: "We are pleased to welcome the state investment company as an equity owner of our firm.

"We are proud to be part of such a significant transaction for both of our organisations."

New York-based Blackstone was earlier this year involved in takeover negotiations with British supermarket chain J Sainsbury.


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