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Chinese companies expected to increase European investments

CHINESE companies are likely to increase and diversify investments in Europe after investment value hit a record US$18 billion last year, Baker & McKenzie said yesterday.

Chinese companies completed 153 direct investment deals in Europe last year with total value doubling to US$18 billion yuan compared to 2013, according to a report co-authored by Baker McKenzie and China International Capital Corp.

While Chinese outbound investment to Europe was once dominated by state-owned companies, nowadays more private companies, financial institutions and private equity firms are seeking to invest in Europe’s energy, real estate, consumer goods, and technology sectors, according to the report.

A Chinese domestic push to upgrade manufacturing and boost consumption will encourage companies to acquire advanced European technology and consumer brands while a weakening euro could further encourage Chinese investment, said Thomas Gilles, a partner of Baker & McKenzie.

But he noted that an unstable European economy would post challenges for companies to run the acquired assets after the deals completed, adding the overseas expansion of Chinese companies should be strategic rather than opportunistic.




 

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