Carlyle raises Xugong offer by 20%

American private-equity firm Carlyle Group has increased its bid for part of Xugong Group Construction Machinery by 20%, reports the Financial Times. Carlyle is willing to pay a total of US$228 million to Xugong for shares priced at Rmb2.41 each. The offer price has risen significantly since 2005, when Carlyle had offered to pay Rmb2.01 per share. Like others, the company has tried to manoeuvre around strict Chinese regulations that prevent foreigners from easily acquiring industrial assets in China.

The difficulties encountered by Carlyle began when a survey conducted by China's National Development and Reform Commission showed that the high level of merger and acquisition activity in the area had caused an outside monopoly of the local equity market.

In early 2006, Li Deshui, a former director at China's Bureau of Statistics, urged authorities to introduce regulations to prevent foreign companies from gaining control of China's equity market.