Beijing E-Town
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| Agency overview | |
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| Formed | 1992 |
| Parent department | Municipal government of Beijing |
| Website | www |
Beijing E-Town is an economic development agency of the Beijing municipal government established in 2009 to foster high tech manufacturing in Beijing.
E-Town supports high-tech manufacturing by operating an industrial park in the Daxing district that accounts for much of the manufacturing in Beijing and in investments in overseas high tech enterprises. It makes investments both through outbound acquisitions as part of a consortium with other buyers and in backing private equity funds for domestic and cross-border buyouts and venture capital investments.
Through acquisitions as part of a consortium with other buyers, E-Town International has acquired several high tech manufacturing businesses in the semiconductor, aviation, automotive, and telecom sectors.
One of E-Town's earliest outbound investments was in UTStarcom in 2010. In exchange for newly issued common stock shares in UTStarcom, Beijing E-Town International Investment and Development Co., Ltd., an investment subsidiary of E-Town, invested $25 million in the company.
In 2010, E-Town along with the Tempo Group and Aviation Industry Corporation of China, both Chinese companies, formed a joint venture, Pacific Century Motors, as an investment vehicle for acquiring Nexteer Automotive, an auto parts company producing steering and driveline components, from General Motors for $450 million. In the wake of the global economic crisis, Nexteer had been on the brink of closure. The acquisition by the Chinese buyer group led to a turnaround with revenue growing from US$2 billion in 2010 to US$2.4 billion in 2013. During that period of time Nexteer has invested $400 million in the US operations of the company.
E-Town has sought to enter into the aviation business through outbound acquisitions and floated a plan for aviation manufacturing in Beijing.
It holds 40% of the ownership interest in Superior Aviation Beijing, which in July 2012 proposed a US$1.79 billion purchase of Hawker Beechcraft, a US-based business jet and general aviation manufacturer that entered into bankruptcy reorganization in the same year. However, the deal was not consummated due to concerns that included the prospect of rejection of the deal by US regulators. Hawker Beechcraft blamed the failure on anti-Chinese investment climate in the US led to regulatory uncertainty for approval of the deal. Following collapse of the deal, Superior paid a $50 million "break fee" to the company as had been agreed according to the purchase agreement. The lack of a buyer to come to the rescue, the company emerged from bankruptcy reorganization as a new standalone entity, the Beechcraft Corporation, a much smaller company with the closure of the jet lines and layoff of workers.
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