Xugong Construction Machinery Co. abandoned a plan to sell a 45 percent stake in its company to U.S. private equity firm Carlyle Group, a listed subsidiary of Xugong Group said in a statement on Wednesday, according to the Shanghai Securities News.
According to the statement, all agreements related to the buy-out deal have expired and Xugong has no intention to continue the deal with Carlyle, ending a three-year-long saga.
On October 25, 2005, Carlyle agreed to purchase an 85 percent stake in Xugong Machinery, China's largest producer of construction equipment.
However, the deal quickly spurred public debate about whether foreign capital could hold a controlling stake in the country's key industrial assets. Some argued that selling Xugong would endanger China's industrial safety and called for restrictions on acquisitions by foreign capital.
Carlyle, in response, reduced its proposed stake to 50 percent and finally to 45 percent, but still failed to receive approval from regulatory authorities.
For more details, please read the full story in Chinese:
(http://paper.cnstock.com/paper_new/html/2008-07/23/content_64184229.htm)
(China.org.cn by Yan Pei, July 23, 2008)
