bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

authorLocations

authors

paywallTypes

corrections

sponsorType

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Peggy Sito

Investment patterns in China are changing.
Interest from European companies in acquiring Chinese assets, including state-owned enterprises intensified last year, while the US-China trade war made American firms cautious and also curtailed outbound investments by Chinese companies, according to investment bankers.
“As China continues to seek to attract foreign investment in larger SOEs which are undergoing reforms to make them more competitive, that creates many opportunities for foreign investors,” said Samson Lo, head of mergers & acquisitions, Asia at UBS.
China embarked on a revamp of its state-owned enterprises in 2015 to tackle rising corporate debt and also to make them more profitable and responsive to market forces.
China consumer market ‘too big to ignore’, to attract domestic and foreign M&A activity amid trade war
“Over the last two years, SOE restructuring has tended to be overshadowed by Chinese outbound investment but it is likely to become more prominent,” said Lo.
China’s outbound investments stood at US$200 billion in 2016 but fell to US$70 billion in 2018 and is likely to fall further this year. However, the decline in M&A activity will be offset by inbound investment, as well as by transactions arising from the establishment of joint venture deals and the restructuring of SOEs in China.

“The escalation in trade tensions between the US and China has made US companies cautious and, while it is unlikely there will be a pickup in activity in the near term, more companies from across Europe are buying assets in China,” he said.
There were 49 deals in China involving European companies last year, up from 32 per cent in 2017. Their value meanwhile jumped 856 per cent to US$9.94 billion from US$1.04 billion in 2017, according to data from financial markets platform Dealogic.
One of the biggest deals last year was Dutch brewer Heineken’s acquisition of a 40 per cent stake in state-owned CRH Beer for US$3.1 billion.
The escalation in trade tensions between the US and China has made US companies cautious

SOEs willing to sell a majority stake are of particular interest to international buyers not only because of the bridgehead they offer into the mainland but also because of the good relationships that the SOEs typically have with the Chinese government.
Raghu Narain, head of investment banking at Natixis Asia-Pacific, said that for European firms it is “all about trying to get growth” which is what China offers.
“They are all looking for high quality growth in producing assets that can leverage China,” Narain said at the Hong Kong M&A forum hosted by Mergermarket and AVCJ on Thursday.
According to UBS’ Lo, the sectors where the Chinese government has relaxed restrictions such as insurance, asset management, banking and automobiles are attracting the most foreign investments, while consumer and health care continue to remain popular.
The New York-based investment bank adviser BDA Partners believes the Chinese government will not ease investments into sectors like telecoms, financial services or oil and gas.
“But in sectors like the car industry, which has been opened up, there might be opportunities for foreign buyers, regardless of whether they are from the US or EU,” said Charles Maynard, founding partner of BDA Partners.
On Chinese firms’ M&A outlook, Lo said that Nordic countries and Australia were particularly popular destinations last year as the US and Europe intensified deal scrutiny.
Additional reporting by Xie Yu and Daryl Cho


China’s M&A deals to rise from decade-low as DeepSeek, AI spur interest, experts say

Baidu’s YY Live, now infused with DeepSeek, adopts YYDS name in Chinese meme-inspired joke

CICC to merge with Galaxy Securities to form China’s third-largest brokerage, sources say

Citigroup eyes US$500 billion in outbound investments from China and East Asia

Mergers & Acquisitions

China has become the happy hunting ground for European asset shoppers as trade war drags on, saps US acquisitions

Heinken last year acquired a 40 per cent stake in CRH Beer, the maker of Snow Beer, for US$3.1 billion. Photo: One Red Eye

Samson Lo, Managing Director, Head of M&A, UBS, photographed in Central. 14JUN19 SCMP / Jonathan Wong

Heineken eyes China’s premium beer market, signs US$3.1 billion deal with country’s biggest brewer

The deal gives China Resources Beer exclusive rights to use the Heineken brand in mainland China, Hong Kong and Macau. Photo: Reuters

SABMiller: Photography of beer culture in China. A waitress carries Snow beer through a busy restaurant. Snow is the largest beer brand in China... and a product of SABMiller's Chinese joint venture, CR Snow Ltd. Photographer: One Red Eye Credit: One Red Eye

China consumer market ‘too big to ignore’, to attract domestic and foreign M&A activity amid trade war

The central business district in Beijing. An unresolved trade war might amplify an inward-looking trend among Chinese companies. Photo: Reuters

Business

Banking & Finance

Companies

China Business

Money

Markets & Investing

Money News

The number of deals involving European firms in China increased by 32 per cent to 49 last year, while value jumped 856 per cent to US$9.94 billion.
Heineken’s 40 per cent stake in CR Beer for US$3.1 billion was one of the biggest inbound investments from Europe last year


The number of deals involving European firms in China increased by 32 per cent to 49 last year, while value jumped 856 per cent to US$9.94 billion.


Banking & finance

US-China trade war

US-China trade war: All stories

China has become the happy hunting ground for European asset shoppers as trade war drags on, saps US acquisitions

The number of deals involving European firms in China increased by 32 per cent to 49 last year, while value jumped 856 per cent to US$9.94 billion. Heineken’s 40 per cent stake in CR Beer for US$3.1 billion was one of the biggest inbound investments from Europe last year

The number of deals involving European firms in China increased by 32 per cent to 49 last year, while value jumped 856 per cent to US$9.94 billion.

Heineken’s 40 per cent stake in CR Beer for US$3.1 billion was one of the biggest inbound investments from Europe last year