On a global acquisition spree, China adds another company
Updated: 2016-02-05 12:26
By Paul Welitzkin in New York(China Daily USA)
|
|||||||||
China's 2016 acquisition spree for foreign companies added another company on Thursday as Beijing Enterprise Holdings (BEH) said it would buy German waste-management company Energy from Waste (EEW) for $1.6 billion.
On Wednesday, China National Chemical Corp announced the purchase of Swiss-based seed and pesticide Syngenta AG for about $43 billion. In January, China National Chemical said it would purchase German machine maker KraussMaffei Group for $1 billion.
China's acquisition spree is not limited to European companies. Last month saw Haier Group, China's biggest appliance company, buy General Electric Co's US appliance business for about $5.4 billion. Also in January, Chinese property and investment firm Dalian Wanda Group said it would purchase a majority stake in Hollywood film studio Legendary Entertainment in a deal valued at about $3.5 billion.
Derek Scissors, a China scholar at the American Enterprise Institute in Washington, said there may be other sectors that will appeal to Chinese buyers this year.
"The entertainment industry in its various forms will likely see investment beyond the Wanda-Legendary deal. Low commodity prices make energy and metals producers attractive if Chinese firms are willing to take the risks. China may also look to buy the power or rail units of large conglomerates such as Siemens," Scissors said.
All of these transactions involve capital outflow from China, which is supposed to be a problem right now. But Scissors said the Syngenta deal is an example of good capital outflow. "Syngenta has technology that China doesn't have and it certainly needs. And the price doesn't appear to be extremely high," he said.
"We see the deals getting bigger and bigger," Patrick Yip, mergers and acquisitions leader for Deloitte China, told The Wall Street Journal in reference to Chinese companies' acquisitions of foreign companies. "I am working on a number of them. Chinese companies want brand power and high technology."
David Brown, transaction services leader for PricewaterhouseCoopers China and Hong Kong, predicts around 50 percent growth for outbound Chinese mergers and acquisitions every year, for the next several years, according to the Journal.
EEW operates plants in Germany, Luxembourg and the Netherlands that burn waste materials to create steam to produce electricity.
EEW is seen as complementary to BEH's sewage and water-treatment operations. This green investment continues a trend in China. In 2015, China invested more than $800 million in 14 mergers and acquisitions of foreign environmental firms that were focused on the treatment and management of waste, wastewater and renewable energy, according to the Latin American Herald Tribune.
paulwelitzkin@chinadailyusa.com
- General strike against pension reform brings Greece to standstill
- Madrid airport sounds alarm after bomb threat on Saudi plane
- Obama proposes new oil tax to fund clean transportation
- UN special envoy announces temporary pause of intra-Syrian talks
- Taliban kill 10-year-old hailed as militia hero
- Obama slams anti-Muslim rhetoric during first visit to US mosque
- Kindness walls bringing extra warmth to the needy
- A robot that grabs red envelopes
- Culture Insider: 9 things you may not know about Start of Spring
- Talented artist makes tiny pencil lead sculptures
- Ten most heartwarming stories about Spring Festival Rush
- China's 'Moon Walker' sends back stunning HD photos
- Starbucks, office rents and CEOs form alternative outlook on China
- China's most beautiful wetlands
Most Viewed
Editor's Picks
8 highlights about V-day Parade |
Glimpses of Tibet: Plateaus, people and faith |
Chinese entrepreneurs remain optimistic despite economic downfall |
50th anniversary of Tibet autonomous region |
Tianjin explosions: Deaths, destruction and bravery |
Cinemas enjoy strong first half |
Today's Top News
National Art Museum showing 400 puppets in new exhibition
Finest Chinese porcelains expected to fetch over $28 million
Monkey portraits by Chinese ink painting masters
Beijing's movie fans in for new experience
Obama to deliver final State of the Union speech
Shooting rampage at US social services agency leaves 14 dead
Chinese bargain hunters are changing the retail game
Chinese president arrives in Turkey for G20 summit
US Weekly
Geared to go |
The place to be |