Chinese hostile takeover of US companies

Part
01
of one
Part
01

Hostile takeovers of U.S firms by Chinese companies.

After extensive research, we found that China-based Tencent, France-based Sanfori, and Canada-based Toronto Dominion are examples of companies that have taken part in hostile takeovers of US firms. The companies they have attempted to acquire through either tender offers or a proxy fight include Medivation, Uber, and Bancorp Commerce.

LIMITATIONS AND DELIMITATIONS

Due to the scarcity of information about Chinese hostile takeovers of US firms, we decided to extend the scope of our research to cover companies from other countries. In addition to this, we found the need to further extend the scope of our research to include sources dated beyond 24 months ago after exhaustive research for recent hostile takeovers produced very limited findings.

SANOFI VS MEDIVATION

COMPANY BACKGROUND
Sanfori is a France-based leader in the pharmaceutics and healthcare industries. Founded in 2004, Medivation is a California-based company focused on the development of treatments for serious conditions using small molecule drugs.

TENDER OFFER
Labiotech published an article back in 2016 about the "race to acquire Medivation". According to the article, Medivation has been targeted for acquisition by Amgen, Gilead, Celgene, Pfizer, and Sanofi. This trend was driven by the fact that Medivation owns Xtandi, a drug used to treat prostate cancer. It was stated that Sanofi has been aggressively attempting to take over Medivation through tender offers which amounted to $9.3 billion. Despite their efforts, they were rejected twice. In addition to this, Pfizer proposed a bigger offer of $14 billion, ultimately beating Sanofi in the race to acquire Medivation.

COMPANY STATUS PRIOR TO TAKEOVER
Prior to the acquisition, Medivation was a public company. This was determined due to the fact that their company revenue was publicly available since 2013. An article by Mercer Capital shows that from 2013 to 2015, Medivation's revenue grew from $273 million to $943 million at a CAGR of 85.86 percent.

TENCENT VS UBER

COMPANY BACKGROUND
Tencent is a China-based technology giant and is one of the leading internet service providers in the country. Uber is a California-based app developer globally-recognized for their ride-hailing app.

TENDER OFFER
Quartz Media recently published an article about a tender offer led by Japan-based SoftBank. The article states that Tencent, which was mentioned to have previously invested in Uber's rivals, has recently joined the share purchase effort. Along with other investors, Tencent and SoftBank are targeting the acquisition of 14 percent of the shares of Uber. The takeover's resolution has not yet been publicly announced due to negotiations being done privately.

COMPANY STATUS PRIOR TO TAKE OVER
Uber has always been a privately-held company. Sources indicate that the latest valuation of the company amounted to $48 billion, which was found to be 30 percent lower than its last valuation.

TORONTO DOMINION VS COMMERCE BANCORP

COMPANY BACKGROUND
Toronto Dominion is a Canada-based financial institution with over 22 million customers worldwide. Bancorp Commerce was the largest homegrown bank in New Jersey.

PROXY FIGHT
NBC News published an article which featured the acquisition of Bancorp Commerce by Toronto Dominion. According to the article, the acquisition proceeded after Bancorp Commerce Founder Vernon W. Hill II was removed from management. It was stated that the acquisition terms consisted of 25 percent cash and 75 percent stock and valuated Bancorp Commerce at $42 per share, for a total of $8.5 billion.

COMPANY STATUS PRIOR TO TAKE OVER
Bancorp was already facing a lot of major problems before the acquisition. Examples of such problems include threats from federal regulators stating that the company won't be allowed to open new branches. Another example would be the removal of two executives after they were convicted for illegally giving loans to the former Philadephia treasurer. It was mentioned that Toronto Dominion was the first to successfully acquire Bancorp Commerce among many attempts by bigger banks in the past.

CONCLUSION

Examples of hostile takeover attempts of US firms by foreign companies include Sanfori's purchase effort of Medivation, Tencent's participation in a tender offer for Uber, and Toronto Dominion's acquisition of Bancorp Commerce following the removal of the latter's chairman and chief executive.
Sources
Sources