Should it be permitted?

[setarip]

The mainland Chinese government has made a bid to acquire UNOCAL, one of the largest U.S. oil companies.

Opinions as to whether the U.S. government should permit the sale of such a strategically important company to a foreign entity?

[cynthia]

In Sweden some of the member owned petrol stations was sold to the land that Iraq invaded.

Even Norway bought all of another american petroleum company interests in Sweden - esso - no more esso in Sweden.

My car still works.

[setarip]

"Even Norway bought all of another american petroleum company interests in Sweden"

That's very different than acquiring the entire company and its worldwide assets...

[Jack Lurker]

Well, if the government dont own it they should not be able to interfere in a private business deal, IMHO. "strategically important" to whom? And why? Would it be so important if it was not a "communist" country? I think not. If they have the money and the owners wish to sell, what business is it of the government?

[cynthia]

Sony bought some american studios...

[setarip]

Movie studios do not control a country's strategic assets...

[Jack Lurker]

Come on setarip, you started this thread. If you have got nothing better to say than that why start it in the first place? Give us your definition of "strategic assets" and tell us what your opinion is, if you have an informed one that is! If all you want to do is patronise and wind people up like usual,then go do it somewhere else! There's always one fly in the ointment and over here it's you!!!

[setarip]

To Jack Lurker

"Give us your definition of 'strategic assets'"

U.S. ownership of the third largest oil reserves. Largest rare earth reserves (critical to weapon development). Massive refinery capacity...

"tell us what your opinion is"

I've posted this question to hear the opinions of others.

(My opinion is that it would be a grievous mistake to permit such a transaction)

Do you have an opinion about this proposed acquisition?

EDIT - I just noticed your first post in response to my question. You said, "Well, if the government dont own it they should not be able to interfere in a private business deal"

The proposed acquisition by the GOVERNMENT of mainland China can hardly be called "a private business deal"...

[Jack Lurker]

Yes, try reading my first post.

Are you suggesting that china want to purchase this company just to aid the devolpment and production of weapons? Seems as though you are inferring exactly that. A hint of paranoia, perhaps.

Posting a question that you know will cause conflict just to get opinions is worse than spamming in my book.

Edit: I cant keep up with you editing your posts after you know they have been read!! Maybe you should read the posts in the first place!!

[Jack Lurker]

So, you would object if the deal was the other way round? I think not. I have better things to do than indulge in a battle of wits with an unarmed man. Good day to you and your paranoia.

[blutach]

Yes, I'm with Jack Lurker here - the West has plenty of investment in China these days. I can think of many many companies which have big investments in manufacturing there - your mobile telephones are most likely made in China. We have cordial diplomatic relations with them, as with other nations.

Xenophobia is uncalled for here. International trade and investment breaks down such barriers, not the other way round.

As well, did Hong Kong fall apart when it was taken over by mainland China? No, it still flourishes and is a safe place to invest capital.

However, in almost all countries, governments have the right in key industries such as the media and resources to look at these proposed deals. Remember, they also have the right, in the future, if things turn sour, to freeze assets - and this did the US no harm whatsoever in relation to its freezing of certain middle eastern countries' gold reserves and other financial assets. So it is the Chinese who are taking the financial risk here.

As well, on purely financial grounds, why deny the shareholders of this company the right to sell? They are not obliged to sell into the bid. The whole foundation of the securities exchanges worldwide is the free and unfettered purchase and sale of securities, and to deny the UNOCAL investors the right to decide on whether to make/take a profit goes against the grain.

The bid should be allowed but the government will undoubtedly review it. Maybe setarip would prefer if Australia's BHP Billiton or the UK's RTZ came along and rescued Unocal as a white knight (I am sure they will be looking at it).

Regards

[tigerman8u]

IMO the government should not interfere in private business unless it would be a security risk to the ppl of the nation. Note I did not say security risk to the government because IMO our government/politicians is probably the biggest security risk we ppl have. I call it the US WMD

[LT. Columbo]

"whether the U.S. government should permit the sale of such a strategically important company to a foreign entity?"

definetly not, they ought to sever all ties with china. they are proving to be just as crazy as north korea.....

today;

http://www.msnbc.msn.com/id/8587597/

[blutach]

Gee - I am shocked that this thread is, or at least has the power to, divide us on racial lines. This is not what we are about, is it?

Strategic assets, including rare earth ones, can not be willy nilly dug up and sent to Chinese reactors. There are export controls etc.

Last year a foreign (albeit Swiss) company bid for Australia's Western Mining Company, one of the world's largest Uranium producers (amongst other things). Australia's Foreign Review Investment Board allowed the bid. As it turns out, the price wasn't high enough and a counter bid from BHP Billiton won the company. But the important thing was that the government felt export controls were good enough to ensure Uranium was not sent simply to the higest bidder.

Enough said - in any event, what the heck has this got to do with Digital Digest? We are not the Foreign Investment Digest.

Regards

[DiscoInferno]

Damn, that china/nuclear bomb story is scary.