Xinhua Finance to buy U.S.-based Market News
( 2003-12-10 09:11) (Agencies)
Xinhua Financial Network Ltd., a news agency part-owned by the Chinese government, said on Tuesday it will buy U.S. financial news service Market News International Inc., giving it a firm foothold on Wall Street.
The deal is the first acquisition of a sizable Western news service by a Chinese company and comes as Chinese Premier Wen Jiabao was in Washington to meet President Bush. New York-based Market News is a niche news service with 5,000 subscribers, among them traders and investors, willing to pay for the company's chatty, inside view of Wall Street.
Hong Kong-based Xinhua Financial, founded four years ago by U.S. expatriate Fredy Bush, boasts Chinese state news agency Xinhua as its largest investor, owning about 20 percent.
Market News Chief Executive Mike Connor said his company was excited about the Xinhua link and that all 70 staffers will remain working under the Market News banner, which will now be expanded to include coverage of Asian markets.
"We wanted to create a global company. Xinhua wanted to acquire a presence in North America and Europe and we saw great complementarity," Connor told Reuters.
Marvin Zonis, a professor at the University of Chicago Graduate School of Business, said, "This acquisition ought to put people on notice that China intends to be a participant in the global financial community."
"People who think China is just going to be the factory to the world should realize that is not at all the case," he said.
The tie-up provides more competition for Reuters Group Plc, Dow Jones & Co Inc. and Bloomberg LP, which already serve Chinese clients. Competition between financial news services is already intense following a downturn in the financial services sector.
Reuters is Market News' largest distributor.
Market News is privately held and does not report its sales figures but insiders told Reuters the company had been on the block for the past three or four years and that the financial situation at the company has been tight.
"The mood is mixed here," a Market News employee told Reuters. "We don't really know what to think of the Chinese connection. The Chinese premier is in town, now we know who the supreme leader is."
The 20-year-old firm provides fixed-income and foreign-exchange news and maintains offices in Washington, London, Chicago and other financial centers.
Zonis said the acquisition shows that China's government is serious about controlling financial data as well as reporting financial news. It's no accident the deal was announced when the Chinese premier is visiting the White House, he said.
"This is a defining moment," Bush, Xinhua Financial's chief executive, said in a statement. The acquisition gives the Hong Kong provider "a well established business with a long history of successful operations in both the U.S. and Europe."
Xinhua Financial's other investors include Gleacher Partners of the United States, Itochu of Japan and the PR Newswire unit of Britain's United Business Media Plc.
Terms of the deal, expected to close next month, were not disclosed.
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