For the second time this year, Chinese authorities have blocked a major merger being implemented by a Western company with a Chinese company, although in this case the target company had been founded in China and then transplanted to Singapore, and is therefore no longer “Chinese.”
The Financial Times for April 26 reported that Meta’s takeover of Manus, an artificial intelligence startup by China’s Butterfly Effect firm, was ruled not permitted by the National Development and Reform Commission, which “required the relevant parties to cancel the acquisition transaction,” despite its already being far advanced. Even if the transaction ultimately can’t be unraveled, the NDRC’s action will block any further such mergers initiated by Western companies. The NDRC has reportedly told the most advanced Chinese startups like Moonshot and Butterfly Effect (and Bytedance) that they should reject U.S. capital unless it has already been explicitly approved by Chinese authorities.
