China Overtakes European Mergers and Acquisitions

Bargain esteem in Europe has fallen by $200 billion in the past year, not boding well for Europe! Following 2016’s Brexit, European businesses are reluctant to spend and it seems only China can rescue to market. Credit Suisse believes China will be able to improve economic standings as it had already spent $144 billion on foreign businesses halfway through 2016. More than 18,5% percent of European acquisitions are owned by China, more than any other country in the world. 2016 saw the $43 billion takeover of Syngenta, a major Swiss pesticide company, by ChemChina, a Chinese agricultural company.

While the rest of the world is being more hesitant with spending, China has seen no reservation with its investing. This is thought to be because 70% of investing from China comes from state-owned companies. The Government itself funds these investments, explaining why there is no shortage of capital. With the state of Europe’s economy, this makes it easier for China to invest and many European companies accept the investment gladly. The worse Europe performs, the better it is for China in terms of low expenditure with guaranteed high reward when the economy picks up again. Credit Suisse is watching this development with anticipation, curious to see how China, a growing Superpower, will affect the market next.

About Prof Janek Ratnatunga 1129 Articles
Professor Janek Ratnatunga is CEO of the Institute of Certified Management Accountants. He has held appointments at the University of Melbourne, Monash University and the Australian National University in Australia; and the Universities of Washington, Richmond and Rhode Island in the USA. Prior to his academic career he worked with KPMG.