Blackstone Group Makes First Chinese Investment

Financial advisor firm bought 20 percent stake in chemical company ChemChina for $600 million.

BEIJING (AP) — Blackstone Group LP bought a 20 percent stake in a Chinese chemical company Monday in its first deal in the country since a Chinese government fund bought into the U.S. private equity firm.
New York-based Blackstone paid $600 million for the stake in state-owned China National BlueStar (Group) Corp., the two companies said in a statement.
The deal, which requires regulatory approval, cements Blackstone's status as a key player on the mainland.
The investment was a relatively large one for a country where regulators have been reluctant to allow sales of big stakes in government companies to foreigners.
Efforts by Blackstone rivals Carlyle Group LP and Goldman Sachs Group Inc.'s private-equity division to invest in Chinese firms have been hindered by China's approval process and rising valuations for assets.
A government fund that is to invest part of China's foreign reserves abroad paid $3 billion in May for a stake in Blackstone.
Dealmakers are watching to see whether Blackstone's link with the government fund will help the U.S. firm make mainland deals.
China National Bluestar is a unit of China National Chemical Corp., a state-owned enterprise better known as ChemChina.
According to its Web site, Bluestar makes industrial silicon, titanium dioxide powder, chromate anhydride, epoxy resins and silicane cable materials.
Blackstone will have two seats on BlueStar's board of directors, BlueStar said. They will be held by Antony Leung — Blackstone's chairman for Greater China and a former Hong Kong financial secretary — and Ben Jenkins, Blackstone's head of private equity for Asia Pacific.
''We hope to use our global network to accelerate and expand BlueStar Group's international and domestic growth,'' Jenkins said.
Blackstone, an investment partnership, went public in late June. Its shares were priced at $31 and rose as high as $38 on its first day of trading but have fallen sharply since then.
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