Pillsbury Winthrop Shaw Pittman

Montage IPO — are the US markets re-opening to Chinese companies?

By Thomas M Shoesmith and James J Masetti

The US capital markets — the largest in the world — have been all but closed to Chinese companies for more than two years. The successful initial public offering (IPO) of Montage Technology, and e-commerce giant Alibaba’s announcement that it will seek a US listing, may signal the long-awaited re-opening of the US capital markets to Chinese companies. There are also lessons learned.

Pillsbury recently represented the underwriters, led by Deutsche Bank Securities, Barclays and Stifel, in the successful $150m (£92m) IPO of Chinese semiconductor company Montage Technology Group. This is encouraging news for Chinese companies watching the international capital markets. There are also some clear lessons learned from this IPO.

Between 2004 and 2010, more than 300 Chinese companies went public in the US, many of them middle-market enterprises, across a range of industries. A large percentage of them are now gone, taking themselves private, delisting or simply going dark. A small but significant minority are embroiled in SEC investigations and stockholder litigation. As a consequence, the US markets have been all but closed to Chinese companies for more than two years…

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