Newsletter 2018-10-03

3 October 2018

Hi everyone,

Are we there yet? Are the holidays finished? I think we’re right around 5 weeks and counting, combined Israeli and Chinese festivities. Holidays are fun and all, but I mean…. small doses, right? I hope everyone has had a happy, merry time and is ready to hit the ground running October 8th!

China-Israel deals have been rolling along with the past couple of weeks seeing some pretty big spends, like a $70m round and an estimated $100m acquisition of Keystone by Venus Medtech. AND ​Sichuan Airlines launched their direct Chengdu-Tel Aviv route. Can I get a hallelujah!!

Let’s talk about Playtika.

The $4B+ deal announced back in 2016 (yes, 2 (two) years ago). We reported early in the year that the deal had not yet been completed. And guess what? It still hasn’t been completed. In the past couple of months Giant Networks has been trying to “restructure assets” (i.e. acquire Playtika) but there has been a lot of back-and-forth with the China Securities Regulatory Commission, including a suspension of trading last month during the CSRC's review of the asset restructuring.

Things seem to be getting urgent because the dozen or so entities that makes up the consortium that agreed to acquire Playtika might be having a change of heart. One possible reason relates to the fact that the consortium took out $4 BILLION in bank loans for the acquisition. I don’t think they expected it to take two years. The lenders must be pretty ok with the timing though. Financing costs are high. Another possible reason is that since the acquisition was decided in October 2016, there have been major regulatory changes in China restricting and prohibiting certain target industries. Playtika happens to develop online casino games, but Giant insists it is after Playtika’s AI capabilities. Outbound investment in gambling industry companies is prohibited, but outbound investment in foreign AI companies is encouraged.

There is a really good in-depth look at what the heck is going on with Giant and Playtika in this article, which is in Chinese, but Chrome or Google Translate can help if language is a problem​.

Enjoy the newsletter, and as always give me a shout with thoughts and questions, or just to say hello.

-Laura


China-Israel Business News Digest

Headlines here; go ahead to the website for summaries and original articles.

  • Zhejiang Province and Israel establish China-Israel Chinese Medicine (Teaching Cooperation) Center.
  • Chengdu Kanghong Pharma Solidifies Ownership of IOPtima.
  • China's Venus Medtech buys Israeli co Keystone Heart.
  • Venus Medtech Announces Agreement to Acquire Keystone Heart.
  • TransEnterix Acquires Assets of MST.
  • MeMed Raises Over $70M in Financing Round.
  • Mobike Enters Israeli Town Left by Ofo.
  • The Elephant Extends Asian Presence by Partnering with Leading Chinese Exchange ShareX.

Access all summaries and original articles on the website.


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