China
Written on March 18, 2008
A state-owned Chinese financial firm wants to change its deal to buy into Bear Stearns Co. following the takeover of the troubled Wall Street bank, the chairman of the Chinese firm’s parent said Monday.
Citic Securities Co. wants to make a "technical adjustment" in its deal, said Kong Dan, chairman of Citic Group, talking to reporters during a meeting of China’s legislature. He gave no details but denied an earlier media report that quoted him as saying the deal was canceled.
Citic agreed in October to invest $1 billion in Bear. The U.S. firm was to make a similar investment in its Chinese partner and the two were to launch an Asian securities joint venture.
JPMorgan Chase & Co. and the U.S. government, in an extraordinary measure, stepped in late Sunday to save Bear Stearns, one of big five banking houses on Wall Street, which succumbed under the weight of a broadening global credit crisis overnight payday loans. Markets from Asia to Europe tumbled on the news and U.S. stocks headed for a sharply lower open.
Citic Group is the investment arm of China’s Cabinet.
Its agreement with Bear came amid a flurry of investment deals by Chinese entities in U.S. and European banks, which want to replenish their capital following the recent credit crisis.
JPMorgan (JPM, Fortune 500) and the U.S. government stepped in late Sunday to save Bear Stearns (BSC, Fortune 500) for the shockingly low price of $2 per share, or $236.2 million.
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