China Eastern Air Holding Co is to acquire a 10% stake in Air France-KLM Group for about €million. This is the Shanghai-based carrier’s largest strategic investment and is expected to speed up its global expansion. Both airlines also signed a separate agreement for market cooperation. Atlanta-based Delta Air Lines also announced it will acquire a 10% stake in Air France-KLM. Delta Air is China Eastern’s U.S. partner, and holds a 3.55% stake in China Eastern. China Eastern and Delta will each have one representative on the board of Air France-KLM. China Eastern, Delta and Air France-KLM are members of SkyTeam. China Eastern and Air France-KLM will simplify transit procedures, improve passenger and luggage services, and share some resources. China Eastern has a fleet of more than 650 aircraft and serves more than 100 million passengers every year. It operates 67 flights per week to Europe, the China Daily reports.

The China Banking Regulatory Commission (CBRC) has instructed the country’s largest banks to put six of Wanda Chairman Wang Jianlin’s overseas acquisitions under scrutiny for possible breaches of foreign investment rules. Banks are to cut off funding and reject any applications for financing, foreign currency exchange, or restructuring for the six acquisitions. Some of the acquisitions were made by Wanda’s AMC Entertainment Holdings unit, which the Chinese company bought in 2012. They include the USD930 million acquisition of the Nordic Cinema Group, and the USD1.1 billion purchase of Carmike Cinemas, the fourth-largest American cinema operator. They also cover Wang’s acquisition of the yacht maker Sunseeker International, the Hollywood studio Legendary Entertainment, AMC itself, and Odean & UCI Cinemas Group. The acquisitions are forbidden from being injected into any of Wanda’s China-listed companies, and Wanda is barred from injecting any funds, or conducting any form of financial restructuring involving these assets, if they encounter operational difficulties. The unprecedented instructions would close off any available avenue of financing for the highly leveraged Wanda, which may have contributed to Wang’s decision to sell the majority of his hotel and theme park holdings – including a Harbin park that opened barely two weeks earlier — to Shanxi magnate Sun Hongbin for USD9.3 billion, in what would turn out to be the largest single real estate sale in China’s corporate history. “Wanda is in a lot of trouble,” said Shaun Rein, Founder of the China Market Research Group. “It remains to be seen how much of their growth was built on real asset development with cash flow and how much purely on borrowing money,” he added. A Wanda Group Spokesman in Beijing declined to comment, the South China Morning Post reports. The Anbang Group, Fosun Group, HNA Group and Rossoneri Sport Investment have also been singled out for scrutiny.

Wanda Group will sell 77 hotels for CNY19.9 billion to Guangzhou R&F Properties, one of the biggest developers in Guangdong province. Sunac China, which originally agreed to buy the properties, will still pay CNY43.8 billion to buy 13 tourism-related projects including theme parks from Wanda, scaling back a CNY63.7 billion acquisition announced days earlier. “It is a win-win-win for all our three parties and will largely reduce Wanda’s debt,” Chairman Wang Jianlin said at a hastily called press conference at the Sofitel Hotel in his flagship Wanda plaza in Beijing. “It’s also a big step forward in our asset-light transformation,” Wang said. An adjustment in the acquisition strategy “would release more liquidity for Sunac and help us reduce debt,” Sunac’s Founder and Chairman Sun Hongbin said, in explaining why his company dropped the plan to buy Wanda’s hotels.

A consortium led by China Vanke Co, Goldman Sachs’ former China Chairman, and Chinese fund Hillhouse Capital has won a management buyout to take over Global Logistics Properties (GLP), the largest operator of warehouses in China, in Asia’s biggest-ever private equity acquisition by value. The Nesta Investment Holdings MidCo consortium will offer USD11.6 billion for control of Singapore-listed GLP, aiming to delist the company from the city’s bourse and take it private. Vanke is the Nesta consortium’s largest shareholder, while the remaining members represent a balance of interests between GLP insiders, including Chief Executive Ming Mei, GLP Director and Goldman’s former China Chairman Fang Fenglei, and existing GLP shareholder Hillhouse. Bank of China Group Investment owns the remaining 15%. The buyout has the support of GLP’s largest existing shareholder GIC, Singapore’s sovereign wealth fund, owning 36.8% of the warehouse operator. “By being a major shareholder of GLP, Vanke expects to see significant synergy between the two companies,” Chairman Yu Liang said in a statement. The deal will help Vanke to “improve its strategic layout in the logistics property sector as well as enhance its influence in the area,” he said. Nesta beat out a rival group led by Warburg Pincus, the South China Morning Post reports.

Four of China’s biggest offshore asset buyers – Anbang, Fosun, HNA Group and Wanda – were placed under regulatory scrutiny since mid-June, causing the prices of companies linked to them to plummet. The China Banking Regulatory Commission (CBRC), in an unusual move, ordered banks on June 6 to check the offshore exposures to these companies. The regulator was concerned about capital flight and money laundering. Even tough so far the CBRC could not pinpoint any wrongdoing, investors are getting cold feet. Shares of Shanghai Fosun Pharmaceutical Group plunged as much as 7% in Hong Kong and 8.9% in Shanghai, after rumors that the conglomerate’s Founder and Chairman Guo Guangchang had been “unreachable,” an euphemism implying that the person had been detained for investigations. Guo had indeed been unreachable, only because he had been in Xian delivering a speech and the delay of his return flight to Shanghai. Fosun issued two statements denying anything untoward. It was the second time in a month that Fosun had been struck by rumors. On June 22, Fosun’s shares along with those of Wanda, plunged on speculation that the CBRC was checking up on their loans, while the companies were affected by “political risks.” “All these big companies are in the spotlight as part of the clampdown on financial risk, but we are all in the dark as to what is really going on. Is it anti-corruption? Abuse of cross-border flows, illegal financing? Wasteful investment? We just don’t know,” said Fraser Howie, author of three books on China’s financial sector. “Large-scale investments made by private companies in China “should be fine,” said Li Daokui, a Tsinghua University Professor and former Advisor to the Chinese central bank’s monetary policy committee, as reported by the South China Morning Post.

The State-owned Assets Supervision and Administration Commission (SASAC) has approved the merger of China National Machinery Industry Corp (Sinomach) and China High-Tech Group Corp, as it continues to reform the structure of state-owned enterprises (SOEs). Sinomach ranked 293rd in the Fortune 500 in 2016, with 2015 profit totaling CNY4.8 billion on revenue of CNY222.7 billion. China High-Tech’s main business is textile equipment making. it reaped CNY43.4 billion in sales and CNY100 million in profit last year. The merger brings down the number of China’s central SOEs to 101.