In the ultimate David and Goliath story, the China Petroleum & Chemical Corp., Sinopec, Asia's largest refiner and one of China's biggest state-owned firms, dropped its hostile bid to take over the much smaller, privately-held China Gas Holdings after a contentious struggle lasting nearly a year, according to major media stories.
Sinopec is 150 times the size of China Gas by revenue, The Wall Street Journal reported.
Along with ENN Energy Holdings, Sinopec offered U.S. $2.2 billion for China Gas in December, but China Gas refused the offer, calling it "opportunistic," according to The WSJ.
Over a ten-year period China Gas founder Liu Minghui built the company into one of China's largest gas distribution networks controlling pipelines that serve over six million customers. China Gas' rapid growth benefited from a push by Beijing for cleaner energy.
Monday the companies announced that the deal had not obtained regulatory approval and so the bid was being dropped, Reuters reported.
China Gas shareholders include the state-owned Beijing Enterprises Group with a 51 percent stake, according to the China Economic Review.
In a separate statement on Monday Sinopec and China Gas announced that they will set up joint venture to distribute liquefied petroleum produced by Sinopec and develop city gas projects, which "industry watchers view as a move to save face," also from the China Economic Review. Sinopec now has a 5 percent stake in China Gas.
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