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US Carlyle Group's purchase of Xugong Group halted by China regulator

BEIJING (AFX) - China's Ministry of Commerce (MoC) has refused to approve US-based private equity firm Carlyle Group's planned purchase of a majority stake in Xugong Group Construction Machinery Co Ltd, the Guangzhou-based Southern Weekly reported.

Citing unidentified sources, the newspaper said that the ministry believed, 'a foreign investor should not hold a controlling stake (in Xugong Group)'.

In October last year, Carlyle Group signed an agreement to pay 375 mln usd for an 85 pct stake in Xugong Group, China's largest construction machinery manufacturer and distributor.

The deal caused strong objections over concerns that foreign investors' had excessive control of the equipment manufacturing sector.