RED China is Coming

[oldsauroraman1]

China's CNOOC to launch 19 billion dollar bid for Unocal: newspaper

Wed Jun 22, 5:51 PM ET

China National Offshore Oil Corp. (CNOOC) has agreed to launch the biggest ever takeover offer by a Chinese group with a 19 billion dollar bid for US oil major Unocal, according to a report.

The decision to trump a rival bid for Unocal by ChevronTexaco was reached by CNOOC directors in a tense six-hour board meeting held in Beijing on Wednesday, The Financial Times said in its online edition.

It quoted people close to the situation as saying CNOOC had decided to bid about 67 dollars a share for Unocal and would offer to take on 1.6 billion dollars of the US energy group's debt.

At that level, the offer would value Unocal at 19.8 billion dollars, the newspaper said.

It would be higher than Chevron's cash-and-shares offer of 16.4 billion dollars plus debt, and represent a modest premium to Unocal's share price, which closed in New York Wednesday at 64.86 dollars.

If successful, it would represent the biggest overseas acquisition by a Chinese company, dwarfing the Lenovo Group's recent 1.25 billion dollar takeover of IBM's personal computer business.

But the FT quoted New York bankers as saying that CNOOC will have a difficult task persuading investors that its offer is high enough to compensate for any risk that the deal might be blocked by US regulators.

"CNOOC will have serious difficulties closing this deal given legal, bureaucratic and political barriers," Robin West, chairman of PFC Energy, a Washington consultancy, told the newspaper.

CNOOC, China's third-largest oil group, confirmed in a statement to the Hong Kong Stock Exchange earlier this month that it was considering launching a possible bid for Unocal.

It said a further announcement would be made "if and when appropriate."

If CNOOC were to go ahead with an attempt to take over Unocal, it would fit into a larger Chinese strategy of securing access to energy sources overseas for the country's power-hungry industries.

Unocal has gas and oil reserves in Thailand, Indonesia and Central Asia. It has more than 6,000 employees, with most of its activities in Asia and North America. It has no refining or marketing operations.

ChevronTexaco, the number-two US oil company, announced its takeover bid for Unocal in April. The bid received US regulatory approval on June 10.

news.yahoo.com/news?tmpl=story&u=/afp/20050622/ts_afp/uschinaoilcompany_050622215104

[Letitroll98]

[oldsauroraman1]

That's great! And, it shows what China really would love to do as well. Japan built its ships/warplanes with our scrap in the 30's and sent them back to us in the 40's. Why is China building up its military???

[macadamiaman]

Oh now you swing from economic to military so quickly - it's a biiit different

China is a poor country that just wants more wealth. They do not want to take us over militaristically (is that a word?), at least not in the next few decades.

[Letitroll98]

Yes, GM is building it's new plants in China not for export back to the US, but to sell to all the newly affluent Chinese. China will surrender to the power of Capitalism, not Democracy. You simply cannot comment on China without extensive experience with how their system functions. It's not at all like the sound bite press and jingoistic politicians would have you believe. China is a very diverse and complex society with a multitude of political and economic factors driving everything that happens there. By no means will a monotheistic or simplistic policy be effective in dealing with the rapidly changing face of China. However, the one driving goal behind all of their actions of late is to join the world community as an active, responsible partner, I say we invite them in. The alternative may be to create the Japan of 1937-41.

[oldsauroraman1]

macadamiaman said:

Oh now you swing from economic to military so quickly - it's a biiit different

China is a poor country that just wants more wealth. They do not want to take us over militaristically (is that a word?), at least not in the next few decades.

I have some swamp land in Florida for you too. They will wage war before long. Tiawan is in their sights and that most surely will involve us - they know it. That's why they have bought up the old Russian fleet of ships. Our own military analysts, CIA, etc. have been voicing their serious concerns about China's massivly expanding military. Communism has as its goal world domination.

[Aurora40]

letitroll98 said:

Yes, GM is building it's new plants in China not for export back to the US, but to sell to all the newly affluent Chinese.

Actually, GM is importing engines they make in China back here. I believe they are used in the Chevy Equinox.

[Letitroll98]

Oh, of course not every single thing is for Chinese consumption. Just that it was mildly surprising to me that China had moved so fast that GM sees them as a market, not just a cheap manufacturing site.

OAMan, there are many things about the Chinese government that are reprehensible, relating mostly to their human rights violations. However wouldn't you be more worried about North Korean expansionism than China buying some rust buckets from the expired Soviet Union? This would hardly make them a Naval powerhouse. I don't trust the Chinese either, but I believe we differ on what their motives are.

The Chinese care way less about Taiwan than about access to Far Eastern oil reserves, and if they are building up their military it is to that end rather than some ancient feud between Chiang Kai-Shek and Mao. However you are correct in that these old political issues die hard over there and as crazy as it sounds, the right wing does still have designs on that ridiculous little Island. It would be our job to encourage the moderate voices in China by fueling their capitalistic urges with a guaranteed energy supply so they don't see a military option as their only out. Something we didn't do with Japan in the Thirties which resulted in their right wing gaining power over moderate voices and leading us into WWII, and something our present administration is not doing effectively at present.