ANNOUNCEMENT: Expert Investor is now PA Europe. Read more.

Chinese firms scooping up more European businesses

UK was the top destination, followed by Germany

The number of takeovers in Europe originating from China saw a rebound in 2021, according to a new report from Ernst & Young Germany.

Chinesische Unternehmenskäufe in Europa (Chinese Corporate Acquisitions in Europe), which came out this week, said that the number of transactions increased between 2020 and 2021 from 132 to 155. Meanwhile, Ernst & Young said that the value of investments and acquisitions increased more than eightfold to $12.4bn from $1.5bn.

The favoured destination for Chinese investors in 2021 was the UK, pipping Germany by a single takeover. After just 21 deals in 2020, Chinese investors bought out 36 UK firms in 2021. In Germany, that figure rose from 28 to 35 over the same time period.

But, according to Ernst & Young, the 35 takeovers in Germany last year do not include venture capital investments in start-ups, amounting to $1.9bn, and in which Chinese companies were active as part of international investor groups.

Yi Sun, partner and head of China business services at Ernst & Young, said in a statement: “Chinese companies remain cautious about investing in Europe overall. On the one hand, the pandemic continues to contribute to this, which still led to disruptions in 2021 – also due to containment measures such as travel restrictions, strict quarantine rules for people travelling to China from abroad and lockdowns both in Europe and in China itself.”

She added: “In recent years, most Chinese companies that have already taken over companies abroad have been more concerned with pushing ahead with restructuring in Europe than with expanding further – especially in the automotive supplier and mechanical engineering sectors.”

According to the report, takeovers began to take off in 2006, when Ernst & Young report 40 over the year. This rose gradually until 2016, when it peaked at 309, before declining steadily to hit 132 in 2020. 2021’s bump to 155 is the first time the number of takeovers has risen since 2015 to 2016.

MORE ARTICLES ON

MORE IN

  • Can M&A and buybacks breathe life into UK market?

    Can M&A and buybacks breathe life into UK market?

    Both buybacks and M&A should help realise value in UK shares, boosting prices and giving investors another reason to consider the UK stockmarket Not only does M&A activity appear to be picking up, with a high-profile bid for UK electronics retailer Currys, but the scale of company buybacks continues to accelerate. If it goes well,…

  • Capital Group launches multi-thematic Article 8 funds

    Capital Group launches multi-thematic Article 8 funds

    Capital Group has launched a set of multi-thematic sustainable funds that are available for investors in Europe, writes Christian Mayes. The Capital Group Sustainable Global Opportunities fund (LUX) will invest in global equities, while the Capital Group Sustainable Global Corporate Bond fund (LUX) will target fixed income exposure. The launch also includes a multi-asset offering…

  • Bond funds pull in €29.7bn in January – LSEG

    Bond funds pull in €29.7bn in January – LSEG

    Bond products were the best-selling asset class in January, according to LSEG Lipper’s European Fund Flow report, writes Christian Mayes. The asset class pulled in a net €29.7bn in the month, while Money Market USD grouping was the best-selling Lipper Classification after receiving €11.2bn inflows. Providers of mutual funds pulled in €22.5bn, while passives saw net…

  • Quarter of Article 8 funds at risk of greenwashing – MainStreet Partners

    Quarter of Article 8 funds at risk of greenwashing – MainStreet Partners

    A quarter of all Article 8 funds could be accused of greenwashing based on their sustainability framework and practices, according to MainStreet Partners, writes Christian Mayes The 24% of funds classified as a greenwashing risk by the 2024 ESG Barometer report marks a four percentage point increase from the 20% flagged at the end of…

  • EU green rules could stymie decarbonisation projects – ExxonMobil

    EU green rules could stymie decarbonisation projects – ExxonMobil

    The European Union’s climate regulations may lead to it halting its investments in Europe, ExxonMobil has warned. Speaking to the Financial Times, Karen McKee, president of the product solutions division, said the oil and gas giant had struggled to begin decarbonisation projects in Europe due to the regulatory burden. The result, she added, was that…

  • ICE flags need for Europe to double green investment

    ICE flags need for Europe to double green investment

    Investments to modernise energy and transport must double by the end of the decade to reach 2030 climate targets, the EU has been warned. According to the Institute for Climate Economics (ICE), which has released the European Climate Investment Deficit report, the bloc lacks what it calls a “consistent tool” to ensure monitoring of the…