Beijing Skyrizon Makes Third Acquisition Attempt for Motor Sich, Ukrainian Defense Contractor

On August 4, China’s Beijing Skyrizon Aviation submitted a joint bid with Ukrainian industrial conglomerate, DCH Group, marking the Chinese company’s third attempted acquisition of shares in the Ukrainian defense contractor, Motor Sich.  The bid is currently under consideration amid a vocal campaign by the company’s new Ukrainian partner for its approval.  In a statement issued on August 10, DCH Group, asserted that, in this new configuration, the Antimonopoly Committee of Ukraine (AMC), had “no legal grounds” to reject the Chinese company’s bid.

Skyrizon’s two previous attempts to acquire a controlling position in Motor Sich faced political and regulatory scrutiny over concerns that they were non-transparent and posed a national security threat. In this most recent iteration of its acquisition bid, Skyrizon appears to view the inclusion of  DCH as a means to get past this opposition. DCH Group is among the most important industrial financial groups in Ukraine.  Its CEO, Oleksandr Yaroslavsky, is a former member of the Ukrainian parliament (Rada).

The repeated acquisition effort by Skyrizon has raised concern among Ukrainian and Western security officials. In Ukrainian media, concerns have been raised about the national security implications of the deal potentially benefiting, not just China, but also Russia’s military-industrial capability.  Until 2014, Motor Sich was a key supplier of helicopter engines to the Russian military, with China reportedly replacing Russia as the company’s largest market after the annexation of Crimea.  Although Motor Sich has denied the allegations, reports as recently as July 2019 alleged that the company continues its military-technical cooperation with Moscow in some unspecified capacity.

Skyrizon is controlled by Wang Jing, who has previously participated in other projects similarly infused with strategic motivation, including efforts to build an interoceanic canal in Nicaragua.  The company has also been alleged to have ownership links to the People’s Liberation Army.