Chinese Government Reins in European Takeover Spree, Study Shows

(Bloomberg) -- China’s takeover spree in Europe slowed last year as officials in Beijing introduced measures to limit the outflow of capital, according to a study by the Spanish business school Esade.

Chinese acquisitions in the EU fell to about $30 billion in 2017 from a record $41.2 billion in 2016 as the government tried to focus companies on its strategic interests, according to the study led by Esade’s professor Ivana Casaburi.

Such takeovers are set to face further obstacles in the future as Germany, France and Italy push the European Commission for legislation to tighten oversight of investments from outside the EU, especially for companies that develop cutting-edge technology.

“There was a significant drop in investment operations considered to be ‘irrational,’ i.e. outside of the government’s priorities,” Casaburi wrote in the the report. “In particular, there was a significant decline for deals in the entertainment, sport and real-estate sector, some of the sectors most favored by Chinese companies in the last two years.”

Chinese firms are increasingly interested in expanding in the services sector and so future investment may be concentrated in four high-tech sectors: electric vehicles, biotechnology and health services, robotics and fintech, the study said.

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