The trade tensions between China and the United States are putting a spanner on billions in acquisitions and IPOs, causing a new blow to an already sluggish dealmaking market.
Bunge’s acquisition of Viterra for $8.2bn by Bunge Global has reportedly been halted due to the tensions that exist between China and South Africa.
Bloomberg reported on Friday that Bunge executives including CEO Greg Heckman have been to China multiple times in order to get the go-ahead.
The political split is growing and there are concerns that it could drag out.
Bunge, a global leader in agricultural commodities trading and member of so-called ABCD Quartet, has announced that it will acquire Glencore’s Viterra by June 2023.
This merger will create a global trading powerhouse worth $25 billion that can compete with giants such as Cargill Inc.
China is the main holdout. The deal passed all regulatory hurdles across Europe, Canada and Argentina and it’s expected to go through in Argentina subject to any post-closing remedy.
Bunge said it was in “constructive dialog” with Chinese officials. However, the lack formal approval is a major sticking point.
According to sources close to the issue, Beijing’s hesitation isn’t necessarily a reflection of competition issues but rather reflects broader geopolitical tensions between the US and China.
The Chinese commerce ministry and the antitrust regulator did not respond to comments.
Shein’s London IPO is delayed as US tariffs increase
Shein, a fast fashion brand founded in China, is also affected by the tensions between China and the United States.
According to a Financial Times article, the company may consider a restructuring of its US operations due to tariffs imposed on Chinese imports that could put at risk its London IPO.
Reports indicate that the company’s American Division, which represents around a third of Shein’s annual revenues of $38 billion, will be put under pressure by the impending expiration of an important tax exemption called “de minimis”.
On Friday, the de minimis rules expired.
Reuters reported Friday that Shein also cut ties with communication firms Brunswick and FGS which both supported its IPO in London.
Sources confirmed that their contracts expire on April 30, and they will not be extended. This is another indication, according to the report, that the flotation has not gone as planned.
Shein, despite receiving clearance from Britain’s financial regulator (the Financial Regulator), still needs approval from Chinese officials.
The IPO that was initially anticipated in the first quarter of this year will now most likely be pushed to the second half of 2025.
Market anxiety is heightened by the wave of IPO delays
Global financial markets are feeling the ripple effects of US-China tensions, as a number of companies delay their IPO plans.
In recent weeks, firms like Klarna Bank AB and StubHub Holdings Inc. all halted their efforts to list due to the increased volatility sparked on April 2 by Trump’s announcements of tariffs.
It was also reported that the adtech company MNTN Inc., and insurance firm Ategrity Specialty Holdings had put their offerings on hold.
The trading platform EToro Group Ltd. reportedly halted its IPO plans in April, but a Bloomberg article on Friday said that it may launch its US initial public offer as early as next week.
Nevertheless, the sources cited by this report warn that no decision final has yet been taken.
EToro would be among the first of the delayed IPOs that moves forward after the tariff chaos.
The broader picture is still bleak. Protectionist policies in trade and Chinese retaliatory actions are impacting companies that have global exposure and disrupting M&A and capital raising efforts.
As new developments unfold, this post may change.
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