China is getting a $3 billion piece of
, the private equity titan that's preparing to go public.
On Sunday, the Chinese government and Blackstone jointly announced that a Chinese state-run investment company will invest that amount in nonvoting common stock that it will hold for at least four years.
Beijing is getting a discount. Each Blackstone common share it receives will cost 95.5% of the public offering price.
If necessary, Beijing will reduce the number of shares it acquires so that its stake in Blackstone doesn't surpass 10% of outstanding equity.
The investment company doesn't yet exist but will be established soon, according to a joint press release. The investment will close concurrently with the $4 billion IPO.
"We are pleased to welcome the State Investment Company as an equity owner of our firm," said Stephen A. Schwarzman, chairman, chief executive officer and co-founder of Blackstone. "We are proud to be part of such a significant transaction for both of our organizations."
Blackstone and other private-equity firms have been on a buyout binge that has helped boost the stock market.