The CNOOC (CEO) offer for Unocal (UCL) is very complicated. There are political, nationalistic, economic and security issues layered in an order you would like.
The libertarian in me would like to believe that CNOOC should be able to be in the game bidding for UCL and it either wins or it doesn't.
But a US company can not bid in similar manner for a Chinese company. Also the Chinese government owns some portion of CNOOC so UCL is being bid on by the Chinese government, so to speak.
I have not told you anything you don't already know about this. Given the totality of the situation I lean to no, but that no comes with very little conviction. Fortunately I can do my job just fine without having completely made up my mind. You too can continue to manage your portfolio without knowing how you feel about the situation. This is true with a lot of news, and that could be the most important thing to take from the story.
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2 comments:
Roger - Why would a US company want to bid for a Chinese company? If companies in China get such a bad rap on being hyper-competitive when protecting their home turf, is it any wonder why US multi-nationals have trouble doing business in China? There's no incentive other than the so-called "promise" of increasing global market share (think Pepsi). That's just my two cents...
Aaron,
If the time horizon is a year or two I agree. If it is 10-15 years I think it does make sense like with some of the banking deals. There I think the bet is an emergence of a middle class that for now is almost nil.Thanks for the comment.
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