Japan’s Itochu Corp. and Thailand’s Charoen Pokphand Group are in talks to make a significant investment in CITIC Ltd. (00267.HK), the Wall Street Journal reported, citing unnamed sources.
CP Group has a long history in China, being the largest exporter of chickens to the country, while Itochu’s potential move would mark a rare large investment by a Japanese firm in a Chinese state-owned company, the newspaper said.
A deal could signal a further improvement of Sino-Japanese ties after Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe met in Beijing last month.
It would also extend the existing cooperation between Itochu and CP Group. In July, the two forged a cross-shareholding alliance with CP Group acquiring a 4.9 percent stake in Itochu for about US$1 billion and Itochu paying US$854 million for 25 percent of CP Pokphand Co. (00043.HK), a unit of CP Group.
The three companies are all planning to expand across Asia, and an investment pact would help cement their relationship as partners rather than as competitors, the report said. CITIC’s expertise is in financial services, Itochu’s in natural resources and energy, and CP Group’s in food and retail.
The sources said the deal has yet to be finalized and may still need regulatory approval.
– Contact us at [email protected]