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China's 'Political Risk' Includes US Social Networks: Analyst

Thursday, 31 Mar 2011 | 12:53 PM ET

Even as Asia is expected to make further investing in-roads into the U.S., that might not be the case for China when it comes to American social network companies, says a partner at Cravath, Swaine & Moore.

"We've always thought about the risk (from China) in terms of the defense industry, aerospace, but think about social networking, Faiza Saeed told CNBC on Thursday.

"Today, if a Chinese company wanted to buy Facebook or Twitter, I think they would face huge issues ... because you think of those companies and the impact that they have worldwide, the amount of data that they have on Americans," she explained.

In a recent mergers and acquisitions survey it was noted that Asia is most likely to make inbound acquisitions into the U.S., but that depends on how you define the region, according to Saeed.

"If you think about it as China, there's huge political risk in the United States," Saeed said. "If you think about it more broadly as Japan, South Korea, I think it's a little bit different—think of Astellas Osi , you think of Korean National Oil with Dana (a UK cross-border deal).

In addition, Saeed went on to say, all the big private equity deals pre-2008 are coming to a very hospitable market. "Right now what we've seen in the financing side is the terms getting a little looser again, we're seeing a little bit more convenant light."

"We all know we've had artificially low interest rates and that has been a huge boom to private equity, both in terms of digging their way out of some of the difficult deals that were done pre-crisis ... and also the great IPO market," Saeed concluded.



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