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Foreign investors keen on M&A in China on big potential of Chinese consumer market, report

June 22, 2020


Abstract : Foreign investors are likely to continue to merge with or acquire Chinese businesses in a vigorous manner as long as China maintains considerable contribution to the global economic growth, said a report issued recently by Rhodium Group, an independent research provider in the U.S..

BEIJING, June 22 (Xinhua) -- Foreign investors are likely to continue to merge with or acquire Chinese businesses in a vigorous manner as long as China maintains considerable contribution to the global economic growth, said a report issued recently by Rhodium Group, an independent research provider in the U.S..

According to the report, over the past 18 months, the upsurge of mergers and acquisitions (M&As) by foreign investors in China was unprecendented in the past ten years.

Most of the deals were driven by the U.S. and European companies, and as China has eased restrictions on foreign shareholding, they are optimistic about the Chinese consumer market which boasts huge potential, said the report.

It shows that foreign investors' M&As of Chinese assets have been on a rise since mid-2018. In 2019, the M&A transactions by foreign investors in China reached a collective value of 35 billion U.S. dollars, the highest level in the past decade. In the first five months this year, the figure stood at 9 billion U.S. dollars, exceeding Chinese firms' overseas M&A transaction in the same period for the first time in ten years.

The report attributes the enthusiasm of foreign investors to merge with or acquire Chinese assets mainly to three aspects, namely China's strong consumer demand, China's favorable policies for foreign investment, and Chinese enterprises' growing attraction to foreign investment.

If China remains an important source of global demand growth, the European and American companies will strive to invest in the opportunity, Thilo Hanemann and Daniel H. Rosen, two partners of Rhodium Group, said in the report. (Edited by Gu Shanshan with Xinhua Silk Road, gushanshan.1987@163.com)

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Keyword: M&A foreign investors

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