Zhongwang USA LLC, an investment firm backed by a Chinese aluminum tycoon, announced late Monday that its merger agreement with Aleris Corp has been terminated upon mutual agreement and its expiration is on Sunday, said a press release Zhongwang USA sent to the Global Times on Tuesday.
"The decision was driven by uncertainty related to the receipt of the Committee on Foreign Investment in the U.S.' approval from the U.S. government," Zhongwang USA said.
Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, said that the U.S.' inference in overseas mergers and acquisitions (M&A) of its companies is a form of protectionism.
"But overt protection is also bad for U.S. companies' competitiveness, as many U.S. companies do need overseas M&As to activate their businesses," Bai told the Global Times on Tuesday.
He also noted that a stricter management environment would increase difficulties for Chinese investment in the U.S., but that Chinese companies should still fight for business rights in the country
Zhongwang USA proposed a .3 billion acquisition of Aleris in August 2016.
Zhongwang USA expressed disappointment that the acquisition would not proceed, saying that, "through the proposed acquisition, the company was committed to preserving American jobs and investing substantial funds into Aleris, beyond the purchase price."
The Aleris acquisition was a win-win opportunity for American workers and Zhongwang USA, particularly in Kentucky, Ohio, Michigan and Iowa, where Zhongwang's substantial additional capital investment would have increased productivity and American competitiveness while supporting an excess of 1,000 new jobs across the four states, according to the press release
"Although deeply disappointed by the outcome, this has been a constructive process for Zhongwang USA, and our executives have tremendous respect for the management and workers at Aleris - they are a world-class team," the company said.
Zhongwang USA said that the company and its investors will continue to pursue expansion opportunities, including positive, job-creating opportunities in the U.S. and other parts of the world.