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Deloitte China National M&A Leader quoted in CNBC on Chinese outbound investments to Europe
CNBC recently published an article, titled "Germany is trying to stop China from gobbling up its companies — but there may be a downside" on 23 August 2017, in which our National M&A Leader Patrick Yip was quoted in the article.
A Chinese buyer has dropped its takeover bid to acquire a German chip equipment maker Aixtron after the United States blocked the deal for security reasons. There appears to be growing objections in Europe to China buying up firms with strategic technology on the grounds that China does not allow foreign investors to acquire similar targets in China. Patrick believed it might not be beneficial for Europe to adopt such a stringent measure since it would make otherwise interested buyers balk at acquiring companies in need of capital and thus, making these companies less appealing or valuable. He also projected that the UK, given Brexit, might stand to gain if EU as a whole restricts inbound investments from foreign countries.
In light of the Belt and Road Initiative, the Chinese outbound investment appetite has not declined, although the number of M&A transactions so far this year has decreased compared to the same period last year. While the decrease might have been attributable to outbound investments to the more mature markets such as Europe, the smaller countries along the Belt and Road would likely receive a more generous share of outbound Chinese capital, given China's favorable policies towards and financing made available to projects in these countries.
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