Brexit 'no deterrent' to spending spree

Chinese acquisitions in Europe rise by 40%

Gareth WilliamsChinese companies have acquired 170 European businesses worth $90.3 billion this year, according to analysis by UK business advisory firm Deloitte.

The figure, which includes Ctrip’s £1.75bn  acquisition of Skyscanner, is 40% up on 2015 when 122 deals were completed.

Angus Knowles-Cutler, China Services Group chairman for Deloitte, said: “There’s a strong view from Chinese business that they need to internationalise, with less reliance purely on domestic markets.

“Skyscanner is the classic kind of deal that ticks most of the boxes.”

He told China Daily: “It’s the Chinese buying an e-commerce business in the UK, with strong management that it will leave in place and that serves a Chinese middle class that spends money on travel.”

Germany attracted the biggest number of acquisitions by Chinese companies, with 34 deals. The UK was second with 32 followed by France with 21.

The average disclosed deal value was $900 million, although this is distorted by the $43bn mega deal involving ChemChina and Swiss group Syngenta.

Excluding this deal, which is still subject to regulatory approval, the average  is  $350m.

Chinese companies mainly target financial services and the leisure industry, in particular hotels and football clubs, when looking to the UK.

In Germany they have invested in tech-led manufacturing.

Mr Knowles-Cutler predicted a strong 2017 in terms of investment, with increased emphasis on e-commerce.

He said the UK referendum vote to leave the European Union has not acted as a deterrent among Chinese investors.

“I’ve spoken to about 25 major Chinese businesses over the last couple of months since Brexit,” he said.

“I would say overall there’s a net positive among Chinese businesses about Brexit. Sterling has depreciated in value.”

Photo: Gareth Williams, co-founder of Skyscanner

Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.