Itochu and CP take 20% of CITIC Group
Print Edition
JAPAN’S third-largest trading house Itochu Corp and Thailand’s Charoen Pokphand Group are planning to invest US$10 billion jointly in CITIC Group, China’s biggest conglomerate.
Itochu and CP Group will invest US$5 billion each to take a joint stake of as much as 20 percent as both investors seek opportunities in China’s real estate, infrastructure, agriculture, environment and new-energy services, according to a filing from the Japanese firm yesterday.
The Citic investment will be Itochu’s biggest in China and it ranks as CP Group’s second-largest after a HK$72 billion purchase of a minority stake in Ping An Insurance Group, data compiled by Bloomberg News showed.
Itochu said the company and CP Group plan to buy around 2.5 billion shares in Citic for HK$34.4 billion (US$4.4 billion) in April, and another 3.3 billion shares for HK$45.9 billion in October under the deal.
The deal comes as Citic has been broadening its investor base as part of Chinese President Xi Jinping’s efforts to reform state-owned enterprises. Citic completed a restructuring in August by injecting around US$36 billion worth of assets into a Hong Kong-listed unit.
Analysts said investment in real estate and raw materials is risky as these sectors are facing weak conditions in China.
But Itochu CEO Masahiro Okafuji was cited by the Japan Broadcasting Corp as saying at a briefing that the chance to reach consumers in the Chinese market is worth the risk.
“Nothing ventured, nothing gained,” Okafuji said.
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