August 8, 2018 / 9:55 AM / 9 days ago

China power company drops bid for U.S. solar assets due to regulatory hold-up

BEIJING (Reuters) - Shenzhen Energy Group Co Ltd (000027.SZ) said on Wednesday it has ditched a plan to buy three U.S. solar power stations after failing to get approval from a U.S. government panel amid growing trade tensions between the world’s top two economies.

The decision comes after the Committee on Foreign Investment in the United States (CFIUS), a government panel that reviews foreign investments for potential national security risks, has not ruled on its deal which was announced last October, it said.

A company official told Reuters the company did not hear directly from CFIUS, but said it will continue to keep an eye on the U.S. market.

The deal is the latest unsuccessful acquisition by a Chinese company in the United States, including Ant Financial’s proposed $1.2 billion acquisition of Moneygram and HNA’s $200 million investment in Skybridge Capital.

Washington has intensified its scrutiny of Chinese deals and, last week, the U.S. Senate passed a defense policy bill that strengthens the oversight of the CFIUS.

Shenzhen Energy planned to buy RE Mojave Holdings, RE Cantua Holdings and RE Arabian Holding, which own three solar stations in California with total capacity of 6.64 gigawatts, for $232 million. They are indirect subsidiaries of Canadian Solar (CSIQ.O).

Shenzhen’s other overseas assets include a hydropower project in Papua New Guinea and a power plant in Ghana.

Reporting by Josephine Mason, Muyu Xu and Shanghai newsroom; Editing by Christian Schmollinger

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