Chinese Investment in Europe Soared in 2Q - Survey

   By Aaron Back 
 

BEIJING--Chinese investment in Europe surged in the second quarter, according to a survey by private equity firm A Capital.

China's total outbound direct investments in the three months ended June 30, including mergers and acquisitions as well as greenfield investments, rose by 67% from a year earlier to $24 billion, A Capital said in its quarterly Dragon Index report issued Tuesday.

At the same time, mergers and acquisitions by Chinese companies in Europe rose by 95% from year earlier, the report said.

"Investment in Europe should continue strongly as the market remains very open for Chinese investments, valuations are reasonable, and Chinese companies need to move strategically to improve their value-added in terms of technologies, brands and access to customers," A Capital said in a statement.

A Capital is a private equity firm that specializes in helping Chinese companies invest abroad. In July, A Capital invested alongside Chinese luxury goods distributor Sparkle Roll Holdings Ltd. to take a minority stake in Danish electronics maker Bang & Olufsen A/S (BO.KO).

China's global hunt for raw materials continued to be the leading factor in its overseas investment in the second quarter, accounting for 53% of all overseas deals. Prominent transactions included the takeover of Australia's Gloucester Coal Ltd. by Yanzhou Coal Mining Co. (1171.HK).

But in other sectors, Europe was the main destination, accounting for 95% of Chinese companies' non-resource deals. In the largest deal of the second quarter, China Three Gorges Corp. took a 21.4% stake in Portuguese power supplier EDP-Energias de Portugal SA (EDP.LB) for $3.5 billion.

Overall, Europe was the largest destination for mergers and acquisitions by Chinese companies in the second quarter, accounting for 48% of the total by deal value.

For the first half, Chinese mergers and acquisitions in Europe rose by 58% from a year earlier to $7.0 billion, and accounted for 31% of total deal value.

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