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JULY 27, 2005
By Steve Rosenbush China's Global Urge to Merge [Page 2 of 2] THE RIGHT TARGETS. For now, Chinese companies will focus on more achievable goals, such as buying smaller and midsize tech companies. Liu participated in two such deals, including the sale of software maker Ross Systems to Hong Kong's CDC Corp. (CHINA ) in 2004. Jefferies also sold Audiovox's (VOXX ) cell-phone division to UTStarcom (UTSI ) last year for $165 million. While UTStarcom is based in Alameda, Calif., it does much of its business in China. Such deals are fairly easy to close, assuming that the principals observe a few guidelines, according to investment banker Jeff Williams, principal of Jeff Williams & Co. Chinese companies need to pick U.S. targets carefully -- deals that involve companies in aerospace and defense are still impossible to contemplate. But China is hardly alone in that regard. For now, only companies based in a few countries such as allies like Britain, France, and possibly Italy or Germany have a shot at making acquisitions in this area. IRRESISTIBLE FORCE. China's leadership will ultimately do whatever it takes to ensure a rising standard of living. And if China wants access to the top-tier technology that will boost productivity and growth, it may very well have to expand political freedoms at home to win approval of deals abroad. Regardless of who ends up owning Maytag or Unocal in the short term, China's emergence as a power player in the M&A market is only just beginning.
 Rosenbush is a senior writer for BusinessWeek Online in New York Edited by Beth Belton
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