Marubeni again pushes back timing for Gavilon deal close-source

Tue Apr 2, 2013 5:14am EDT

* $5.6 bln deal delayed by China regulatory reviews

* Marubeni is one of two major deals being held up

* Glencore purchase of Xstrata also delayed by China

By James Topham

TOKYO, April 2 (Reuters) - Japanese trading house Marubeni Corp has again been forced to delay the closure of its $5.6 billion purchase of U.S. grain merchant Gavilon because Chinese regulators have not finished their appraisal of the transaction.

It is one of two major deals being held up by Chinese anti-trust authorities. Glencore International Plc on Tuesday extended the closing of its $35 billion purchase of Xstrata Plc due to an ongoing investigation by officials in Beijing.

Marubeni's most ambitious deal, which has received clearance from U.S. and European anti-trust authorities, needs Chinese approval because the trader will account for about a fifth of supplies of grains to the world's most populous country through the purchase.

"It's a very serious matter, so they're being very careful," said a source with direct knowledge of the situation speaking on the condition of anonymity told Reuters.

The Gavilon deal, which includes debt of around $2 billion, would propel Marubeni, Japan's fifth-biggest trading house, into the top standings of global grain merchants and places it in a strong position to take advantage of rising demand for grains from China.

The purchase of Gavilon may close as early as the end of April, the source said, adding that the transaction was not in danger of being cancelled.

Marubeni officials declined to comment and there was no response to a faxed request for comment from the Commerce Ministry on its review of Marubeni's purchase.

The deal, announced nearly a year ago, had been originally scheduled to close in September but was pushed back to end-November/early December before suffering more delays due to regulatory reviews.

Marubeni Chief Financial Officer Yukihiko Matsumura said in February the company expected Chinese approval by the end of March, the close of the company's financial year.

Officials have downplayed media speculation that tension between Japan and China over disputed islands in the East China Sea has delayed Chinese approval.

PRIVATE COMPLAINTS

Foreign companies often complain privately about extended reviews in China's merger approval process.

Another Glencore purchase, that of Canadian grain handler Viterra, was approved by Chinese regulators in December, nearly nine months after the deal was first announced.

China has also imposed conditions like price and supply conditions in many cases, but has only blocked one deal since anti-monopoly laws came into force in 2008. That was Coca-Cola's attempt to purchase juice maker Huiyuan in 2009.

Senior Chinese officials, including Vice Premier Ma Kai, have said China will improve the regulatory system governing mergers and acquisitions by foreign companies as well as the mechanism for anti-monopoly assessment of foreign investment.

Glencore has been waiting for several months for China, the biggest buyer of the materials it trades and mines, to give the go-ahead before it can complete purchase of miner Xstrata, the largest deal in the sector to date.

Glencore said on Tuesday it had held constructive discussions with China's Commerce Ministry but that it had pushed the deadline date back to May 2 because it did not expect to have final approval in time for its previous deadline of April 16.

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