Blackstone Sets Sites on China Mainland

| About: The Blackstone (BX)
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Blackstone Group is "on the verge of announcing its first investment in mainland China" as it looks to take a 20-40% stake in Chinese chemical maker BlueStar, The Daily Telegraph newspaper reported today. An announcement is likely within days, people familiar with the talks say. Sources say the purchase will cost more than $500 million. Merrill Lynch is advising Blackstone on the deal, which is expected to bring Blackstone a number of seats on BlueStar's board. The Chinese government took a 10%/$3 billion stake in Blackstone's IPO in June, which was expected to give the buyout firm stronger prospects of Chinese mainland ventures, where deals have been difficult for foreign companies to pull off. The deal, the Telegraph says, will enable BlueStar to expand both domestically and overseas. BlueStar is owned by China National Chemical. It originally planned to raise about $300 million through a Hong Kong IPO this year, but its plans were scrapped after investment bankers abandoned the transaction due to the company's poor financial performance, the South China Morning Post reported on June 20. Trading in shares in three companies associated with BlueStar was halted Thursday morning in Shanghai, after they said their parent company is in talks on a "major issue."

Sources: Daily Telegraph, Bloomberg, Reuters
Commentary: Real Competition: China and Global SecuritiesBlackstone to Capitalize on Market Downturn
Stocks/ETFs to watch: BX

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