Chinese companies snapping up fewer firms in Europe

21.08.2019 − 

A downturn in Chinese acquisitions in Europe that has emerged since 2017 actually intensified during the first half of 2019. According to a study on merger and acquisition (M&A) activity by Chinese companies in Europe that is drawn up biannually by the auditing and consulting firm Ernst & Young Wirtschaftsprüfungsgesellschaft (EY), based in Stuttgart, Germany, just 81 transactions with a total value of almost $2.4bn closed in the first six months of this year. EY had documented 83 transactions with a total value of $15.9m in the second half of 2018. Some 196 transactions with a total value of $31.2bn took place in 2018 as a whole; 2016 (309 transactions, $85.8bn) and 2017 (247 transactions, $57.6bn) were even more active years. Several major deals played a part in the high transaction volumes seen in recent years, which largely failed to materialise in recent months. The number of transactions in Germany more than halved to 11 in a year-on-year comparison; there were as a few as 10 transactions in the second half of 2018. The investments made by Chinese companies to acquire or buy shares in German companies reached just a fraction of the previous years’ levels at $505m; more than $10bn had been invested in Germany in each year from 2016 to 2018 (2016: 68 transactions valued at $12.6bn, 2017: 54 transactions valued at $13.bn, 2018: 35 transactions valued at $10.7bn).

In terms of the different industries, EY reported that investments continue to focus on industrials and high technology in both Germany and in Europe as a whole. When it came to the break-down of transactions by country, the UK became the leader in the first half of the year with 17 transactions conducted there.

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