China News in brief
J & J buys Chinese cosmetics firm
US healthcare and cosmetics giant Johnson & Johnson announced that it had bought leading Chinese cosmetics firm Dabao on 30 July, just two days before China's new anti-monopoly law took effect.
The two players did not reveal the financial terms of the transaction, but 18 months ago J & J won a bidding war with Avon and Unilever to acquire Dabao for US$337 million.
With sales of 676 million yuan (US$99.4 million) in 2006, Dabao has a vast market among low- and middle-income Chinese, while J & J's personal care businesses in China mostly cover high-end products.
'We plan to develop the [Dabao] brand further with the help of Dabao's unsurpassed local market knowledge and our experience in marketing, research and product innovation,' said Jesse Wu, president of J & J (China) Investment.
The anti-monopoly law requires proposed acquisitions of Chinese firms by foreign players to undergo national reviews. It is widely considered a barrier to foreign acquisitions.
State Energy Bureau formally launched
China's State Energy Bureau has been formally launched, with its new offices opening for business on 8 August. The agency's establishment was approved by the National People's Congress in March in a government reshuffle. Its jurisdictions include drafting energy development strategies and policies, making proposals for energy sector reform, energy sector administration, managing national oil reserves, and promoting renewable energies.
The bureau will report to the National Development and Reform Commission (NDRC), despite wide appeals for the establishment of an independent energy ministry in China. According to Zhang Guobao, head of the bureau and vice-minister of NDRC, the State Energy Bureau does not have the power to set energy prices but can suggest price adjustments to NDRC. Zhang says that the first task for the energy bureau is to fight the serious shortage in coal used for power generation, which has resulted in massive power cuts in wealthy coastal Chinese provinces.
Sinopec to buy Imperial Energy
Sinopec, one of China's largest petroleum companies, is reported to have made a takeover bid for Imperial Energy, a UK-registered oil and gas explorer, according to reports in UK newspaper The Sunday Telegraph .
In a statement, Imperial admitted that it had received 'another approach in relation to a possible cash offer for the company'. The first takeover approach is believed to have been from ONGC, India's biggest state-owned oil and gas producer.
Imperial has built up a number of assets across Russia and other countries in the former Soviet Union. Meanwhile, Sinopec has been lagging behind its competitor PetroChina in terms of oil and gas reserves and exploitation capacity.
Meanwhile, Sinopec predicts that its net profit for the first half of 2008 will be 17.5 billion yuan (US$2.6 billion) - 50 per cent lower than in the same period last year - because of the Chinese government's
cap on the price of petrol and diesel at the pump.