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China M&A activity in Europe increasing: study

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(BEIJING) - Chinese merger and acquisition activity in Europe in the first quarter of 2012 surpassed that of European firms in China for the first time, a study has shown, highlighting China's growing global impact.

"Chinese investors feel that the lingering uncertainty in the eurozone increases their chances of securing favourable deals with debt-laden European companies that were until now inaccessible," Helene Rives, head of China Business Group for PricewaterhouseCoopers (PwC), said Monday in a statement.

A recent PwC report found that in the first three months of this year, 32 investment deals by Chinese companies were recorded in Europe compared with 26 by European companies in China.

"This marks the first time that deal flow volume has been greater to Europe than to China," the report said.

Europe-bound deals by mainland Chinese investors steadily increased from 11 in 2006 to 61 in 2011, the report said, adding that figures from early this year indicate another annual increase.

The report said a "relatively weak euro and declining valuations have proved fertile ground for Chinese investors to find good deals" amid the eurozone crisis.

From Europe to China, deals fell from 163 in 2006 to a low of 85 in 2009 "as European investors felt the effects of the credit crunch and the impending eurozone crisis", the report said.

European M&A recovered, however, to total 125 deals in 2011, PwC said.

Last year European companies invested 7 billion euros ($8.9 billion) in China in M&A deals, while Chinese investments in Europe totalled more than 11 billion euros, according to the report.


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