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NEW YORK (AP) - The Chinese government has agreed to acquire a $3 billion stake in U.S. private equity firm Blackstone Group LP in a deal that marks China's long-anticipated move to diversify how it invests its massive foreign exchange reserve.
The transaction calls for China's upstart state investment company to buy nonvoting shares in the buyout company, concurrent with Blackstone's highly anticipated initial public offering of its management division, which is expected to raise up to $4 billion. The IPO was announced earlier this year, though no date has been set for its debut on the New York Stock Exchange.
China's stake will mark the first time that country's government has sunk cash into a foreign private equity firm, which makes its money by acquiring ailing companies, turning them around, and then selling them at a profit.
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