Hostile raid on China’s biggest developer marks new takeover era

SINGAPORE (Aug 24): The long-running hostile raid on China’s biggest real estate developer isn’t short on drama: There’s a swashbuckling, Mount Everest-conquering company chief who courts controversy; a relatively unknown raider using leverage to increase its heft; a white knight; and surprise new potential suitor jumping in.

While the battle for China Vanke Co. isn’t exactly the "Barbarians at the Gate" takeover of RJR Nabisco by private equity firm Kohlberg Kravis Roberts & Co. during the leveraged-buyout boom of the 1980s, the scale and significance may turn out to be equally important in the annals of Chinese business history. As China’s economic growth slows to its lowest level in two and a half decades, organic expansion is increasingly giving way to consolidation. That the largest and one of the most respected companies in its industry is a target heralds a new era for China Inc. in which even the Goliaths are fair game.

Expect an era of many more takeover bids -- hostile or not -- to begin. In fact, it’s already starting.

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