Just one month into 2016, Chinese companies have announced plans to buy 66 foreign companies worth $68 billion. That’s equivalent to 60% of the value of all such deals last year, according to Dealogic.
The latest takeover came Wednesday: State-owned ChemChina offered $43 billion for Switzerland’s Syngenta, a global supplier of pesticides and seeds. If approved by regulators, the purchase would be the largest overseas takeover ever by a Chinese corporation.
A broad range of Chinese companies has fueled the record start to the year. And the deal flow is expected to continue, experts say.
With growth in the U.S. and Europe strengthening, and China slowing down, foreign takeovers can help companies “cushion themselves against economic fluctuations,” according to Boston Consulting Group.
Overseas purchases are also a way for Chinese firms to expand quickly globally. And with China’s currency losing value, CEOs may want to buy before the yuan loses any more ground.
via CNN
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Alfonso Esparza
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
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