Blackstone Advances Negotiations to Acquire Chinese Real Estate Firm Soho China

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] The world's largest private equity firm, US-based Blackstone, is reportedly in negotiations to acquire Chinese real estate developer Soho China for $4 billion (approximately 4.77 trillion KRW).

According to foreign media such as CNBC, citing anonymous sources on the 10th, Blackstone is said to be negotiating to acquire Soho China for $4 billion. This acquisition deal would be the largest since Blackstone entered the Chinese market. Blackstone is also reported to have proposed to assume all of Soho China's debt, which amounted to about $4.7 billion as of the end of June last year.

Blackstone began negotiations to acquire Soho China in early last month, offering an acquisition price of $0.77 per share, nearly a 100% premium, and sources say the deal is close to being finalized. Blackstone's push for this deal is interpreted as a demonstration of confidence that it can generate profits in China despite the economic slowdown and declining real estate prices. As a private equity firm specializing in real estate investment, Blackstone raised the world's largest real estate fund of $20.5 billion in September last year and previously established Asia's largest real estate fund of $7.1 billion in 2018.

Soho China's real estate investment scale reached $8.78 billion as of June last year. Soho China began selling major commercial real estate in Beijing, Shanghai, and other key locations last year as it pursued overseas market expansion, with Blackstone being one of the buyers of these assets. Through this acquisition negotiation, Blackstone is reportedly interested in securing the real estate holdings owned by Soho China.

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