The number of takeovers in Europe originating from China saw a rebound in 2021, according to a new report from Ernst & Young Germany.
Chinesische Unternehmenskäufe in Europa (Chinese Corporate Acquisitions in Europe), which came out this week, said that the number of transactions increased between 2020 and 2021 from 132 to 155. Meanwhile, Ernst & Young said that the value of investments and acquisitions increased more than eightfold to $12.4bn from $1.5bn.
The favoured destination for Chinese investors in 2021 was the UK, pipping Germany by a single takeover. After just 21 deals in 2020, Chinese investors bought out 36 UK firms in 2021. In Germany, that figure rose from 28 to 35 over the same time period.
But, according to Ernst & Young, the 35 takeovers in Germany last year do not include venture capital investments in start-ups, amounting to $1.9bn, and in which Chinese companies were active as part of international investor groups.
Yi Sun, partner and head of China business services at Ernst & Young, said in a statement: “Chinese companies remain cautious about investing in Europe overall. On the one hand, the pandemic continues to contribute to this, which still led to disruptions in 2021 – also due to containment measures such as travel restrictions, strict quarantine rules for people travelling to China from abroad and lockdowns both in Europe and in China itself.”
She added: “In recent years, most Chinese companies that have already taken over companies abroad have been more concerned with pushing ahead with restructuring in Europe than with expanding further – especially in the automotive supplier and mechanical engineering sectors.”
According to the report, takeovers began to take off in 2006, when Ernst & Young report 40 over the year. This rose gradually until 2016, when it peaked at 309, before declining steadily to hit 132 in 2020. 2021’s bump to 155 is the first time the number of takeovers has risen since 2015 to 2016.