Why a China Deal Didn't Work Out for Morgan Stanley

John Mack turned to China for support in his most desperate hour and ended up getting in bed with the Japanese.

Days of talks with China's $200 billion sovereign-wealth fund to boost its minority stake in Morgan Stanley ended when the U.S. investment bank announced a deal Monday to sell a 10% to 20% stake to Japan's Mitsubishi UFJ Financial Group.

The deal with China Investment Corp. foundered on a number of issues, says a person close to the deal, including an inability to agree on terms and concerns over regulatory approval in both China and the U.S. At a time when Morgan Stanley and other institutions may not have the luxury of waiting another day to escape spooked investors, waiting around for approvals from Beijing is a deal breaker.

A big deal like that would need approval from China's highest administrative body, the State Council. Getting such approvals requires a substantial amount of effort and consensus building in the halls of Beijing and Chinese institutions are ill-suited to provide rapid reactions, especially when Beijing has been burned on past deals with Wall Street firms seeking its money. Bureaucrats in Beijing have withheld approval for government infrastructure lender China Development Bank to cut two major deals this year: a capital infusion for Citigroup and a takeover of Germany's Dresdner Bank.

China Investment Corp. already owns a nearly 10% chunk of Morgan Stanley and would need the U.S. Federal Reserve and Treasury Department to back a plan to take more. The value of that stake has dropped markedly since CIC paid $5.6 billion dollars for it in December last year. A further investment would certainly face criticism for throwing good money after bad and helping prop up Wall Street, while ignoring pressing problems at home.

China's stock market has been among the world's worst performers this year and its legions of small investors have clamored for the government to throw them a lifeline. Last week, the sovereign-wealth fund responded, saying it would commit an unspecified amount of capital to increase its holdings of Chinese state banks by purchasing shares on the open market. That spurred a major rally in local equity markets on Friday and Monday. Those kinds of moves are more politically palpable than helping save John Mack and legions of Wall Street bankers

摩根士丹利(Morgan Stanley)首席執行長麥晉桁(John Mack)在最絕望的時候到中國人那里找救援，最后卻上了日本人的床。

摩根士丹利周一宣布將10%至20%的股份賣給日本的三菱UFJ金融集團(MUFG)。這意味著與中國2,000億美元主權財富基金關于增持股份的談判宣告結束。

據知情人士，摩根士丹利與中國投資有限責任公司(China Investment Corp., 簡稱：中投公司)的交易未果有幾個原因，包括未能就一些條件達成共識，以及對中國和美國監管機構審批的擔憂。面對恐慌的投資者，摩根士丹利和其他金融機構或許已沒有再等一天的自由，而北京方面遲遲未到的批準最終讓這筆交易落空。

這樣大的一筆交易將需要中國政府最高機構國務院的批準。而要得到這樣的批準需要做出巨大努力，在中國政府各個部門之間鑄造共識，但中國的機構還不適應作出快速反應。特別是北京過去向華爾街公司注資的幾筆交易都賠了錢。今年以來，北京的官僚們沒有批準中國發展銀行(China Development Bank)提請的兩筆大交易：向花旗集團(Citigroup)注資，以及接管德國的德累斯頓銀行(Dresdner Bank)。

中投公司已經擁有摩根士丹利近10%的股份，如果增加持股將需要美國聯邦儲備委員會和美國財政部的支持。中投公司去年12月在摩根士丹利投資了56億美元，現在這一投資已經大大縮水。如果追加投資，中投必將面臨諸如拿錢打水漂、扶助華爾街卻對國內亟待解決的問題置之不理等批評。

中國股市是今年全球市場下跌幅度最大的之一，很多散戶都迫切希望政府救市。上周，中投做出了回應，其旗下的子公司宣布將買入三家國有銀行的股票。這個消息令中國股市周五和周一飆升。這樣的舉動在政治上的意義可比救助麥晉桁和華爾街上的一干銀行家們大多了。