China's European spending spree undeterred by UK's Brexit vote

 
William Turvill
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Chinese firm ChemChina has agreed a $43bn takeover of Syngenta (Source: Getty)

Chinese deal activity in the UK has not been slowed by the Brexit vote and the appetite for European takeovers in general is likely to increase, according to a new report.

So far this year, China and Hong Kong-based dealmakers have completed 170 acquisitions in Europe, according to a Deloitte analysis. Meanwhile, in the opposite direction, there have been 52 deals in which European companies have targeted Chinese companies.

Germany was the most targeted European country, with 34 deals, followed by the UK on 32 and France on 21. The accountancy firm also noted that, since the EU referendum, eight UK deals have been completed, with another two expected to complete soon.

Target – Bidder

Cath Kidston (40%) - Baring Private Equity Asia

Astrum Education Group – Sailing Capital Advisors

DoubleTree – Junson Capital

Marina Imports - Hebei Sitong New Metal Material

West Bromwich Albion (pictured) – Yunyi Guokai

Wolverhampton Wanderers – Fosun International

Retlan Manufacturing – CIMC Vehicles

Travelodge in Kings Cross – Magnificent Hotel Investments

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“The appetite of Chinese buyers for acquisitions in Europe continues apace and with encouragement from the Beijing government and favourable exchange rates, is likely to increase,” said Angus Knowles-Cutler, China services group chairman for Deloitte.

“Since the referendum, Chinese buyers continue to close deals here and, if anything, the UK looks a more stable bet than many other advanced economies. Any seller of assets should be thinking about how to include Chinese buyers in their sales processes.”

Deloitte found the UK is particularly attractive to Chinese companies for its financial services and leisure industry companies.

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“Many acquirers are still focusing on bringing the brands and technology back to China, and deals here are now around 10 per cent cheaper,” said Knowles-Cutler.

“Chinese businesses have no problem finding acquisition targets and are now focused on the challenges that arise after signing. This includes managing and motivating western business leaders, and delivering on the promises made.”

Across announced China-to-Europe deals that have either completed or are yet to complete, Deloitte found a total disclosed value of $88.4bn (£71.1bn). This includes the ChemChina takeover of Syngenta. Going in the opposite direction, the figure was $8.2bn.

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