JP Morgan Cazenove, a Britain-based joint venture of JP Morgan Chase, acts as a broker for Rio Tinto, which is now in an acquisition deal with Aluminum Corporation of China (CHINALCO).
Reports said that CHINALCO is to raise its stake in Rio Tinto and establish iron ore, copper and aluminum joint ventures with the latter at a total cost of $9.5 billion. JP Morgan Chase is to act as a financial consultant for CHINALCO.
This would break the industry rule, as an investment bank usually could only advise for one side of an acquisition deal. Peers of JP Morgan Chase could not understand the move by JP Morgan Chase and some believe that the transaction could become uncertain if JP Morgan Chase fails to adjust the present role of JP Morgan Cazenove, even though the latter has helped Rio Tinto successfully conduct mergers and anti-mergers for many times in the past.
Other big as well as relatively smaller international investment banks are also eyeing the M&A market of China. UBS acted as the financial consultant for China Minmetals Corporation in the deal of its acquisition of OZ Minerals at a price of $1.7 billion or AUD 2.6 billion on 16 February 2009.
Besides, such players as Deutsche Bank Group and Macquarie Bank are also busy discovering M&A businesses in China’s Mainland, according to a top executive of a European investment bank.
L.D.