Bankers Hope Chinese Companies to Splurge on European Firms


Published Date : Oct 01, 2015

The recent economic slowdown in China have had a significant impact globally. The global stock markets have remained waivered since China witnessed Black Monday in late August. 

But while the slowdown registered in the second-largest economy of the world is making investor’s to doubt on their forecasts of economic growth, investment bankers claim the situation could be ripe for Europe, particularly the U.K., at least in their line of business. 

The reason being Chinese firms do not want to completely expose themselves to their own economic slump and quivering share prices. Instead they are seeking overseas for business to buy. Established organizations in the western countries, with reputed corporate identity and respectable brands are favorites for both the Chinese consumers as well as top corporate leaders when they ponder shopping on Europe’s boulevards. 

Severin Brizay, the head of M&A in the Middle East, Africa, and Europe for Swiss Bank UBS said that the situation created by the Chinese slowdown will aid to accelerate the pace of acquisition, especially outside the boundaries of China since that balances the risk of investors and geographic exposure. 

Brizay also said that as opposed to popular thoughts they didn’t see any impact of the slowdown on the requests from Chinese buyers who are looking to invest in Europe. He cites that Asian firms have pumped their money by six times to fuel M&A in Europe in 2015 that Europeans have into the businesses in Asia. 

For the first time in many years, a majority of mergers and acquisitions carried out in Europe are fuelled from outside the region, since investments by businesses have become global – a major development which may prove to be a boon for the squeezed firms in Europe who are either unable or unwilling to spend cash on strategic deals.