China makes hostile bid for iron ore in Australia

On the one hand, the increasing wealth and financial sophistication in China makes further hostile cross-border M&A bids more likely. Offsetting this, in the U.S. at least, is negative political sentiment.



Geopolitically, massive Chinese investment in Australia must be troubling for those tasked with sustaining American influence in the Asia-Pacific region.



Yet another interesting sitution that bears closer attention.



From today's WSJ:

MELBOURNE, Australia -- In China's first hostile bid for an Australian company, Sinosteel Corp. launched a cash bid for iron ore miner Midwest Corp. that values the target at A$1.2 billion (US$1.1 billion).



The move illustrates China's strong desire to get a foothold in Australia's resource sector as demand, and prices, for raw materials surge. It also comes as big miners BHP Billiton Ltd. and Rio Tinto PLC squeeze Asian steel mills for a 71%-plus rise in iron ore contract prices.



"It's time Midwest shareholders had the opportunity to decide for themselves the value of their investment in Midwest," Sinosteel President Tianwen Huang said.



If the bid is successful, it will be China's first hostile takeover of a foreign company, according to data supplied by Dealogic, but not its first attempt.