Chinese Mergers in Switzerland Increase

Chinese Mergers in Switzerland Increase

Tue, Feb 27th 2024

EY’s analysis revealing a significant drop to the lowest levels since 2012, despite a rise in Switzerland.

Keystone/SDA – LI XUEREN

The number of Chinese company takeovers in Europe has fallen to its lowest level since 2012. In Switzerland, however, Chinese companies acquired six companies last year, twice as many as in 2022, according to an analysis by management consultancy EY.

Last year, investors from the People’s Republic acquired a total of 119 companies in Europe. This was 20 fewer companies than in the previous year and, in the longer-term trend, almost 200 fewer takeovers than in the record year of 2016, as EY reported on Tuesday.

The investment sums have also shrunk considerably: in 2023 it was still two billion dollars, less than half as much as in 2022. However, purchase prices for the majority of Chinese company acquisitions and investments in Europe are unknown.

In addition to Switzerland; Germany and Austria were also slightly lower. As the number of Chinese takeovers and investments actually increased.

In Germany, Chinese acquired 28 companies, two more than in the previous year. In Austria, two companies were acquired by the Chinese, compared to just one in 2022.

At the height of the short-lived Chinese investment boom in 2016, Chinese investors spent almost 86 billion dollars on company acquisitions in Europe. Since the turnaround in 2017, both the number of company takeovers and the sums invested have been falling continuously.

Experts see several reasons for this: Beijing’s leadership has been slowing capital outflows from China to other countries for several years, in addition to the political tensions between China and the Western world.

Potential Chinese investors check very carefully whether the choice of certain takeover candidates could lead to resistance from governments and public debate

Head of China Business Services for Western Europe

Over the next few years, the EY expert expects Chinese companies to invest heavily in building their own factories in Europe rather than making major acquisitions.

For Chinese car and battery manufacturers, Hungary, Spain, France and the northern European countries are particularly attractive investment locations due to low energy costs, higher subsidies and fast approval processes.

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