Chapter 19
Company Acquisitions: Chinese Are More Active than Westerners
One more area of high China-West tensions is company acquisitions. While Chinese companies, including state-owned enterprises (SOEs), are moving to acquire Western firms on an increasingly large scale, acquisitions of Chinese companies by their Western counterparts remain modest in terms of both the number of transactions and their value.
In 2010, the total value of cross-border M&A transactions (announced deals) involving Chinese firms reached $80.7 billion, as opposed to $63.6 billion in 2009. The total value of deals involving European firms was $641 billion, and firms from the Americas $1.13 trillion (Simpson Thatcher & Barlett 2011).
Acquisitions Asymmetry
Chinese companies are mostly playing the role of acquirers, not the acquired. For instance, in the mining industry China accounted for $17 billion, or 22 percent of all cross-border M&A in the world in 2009. A review by Deloitte shows that only between early 2009 and mid-2010, Chinese auto companies conducted 11 acquisitions abroad and their total value was $2.5 billion, while in 2005–2008 there were 12 acquisitions worth $1.3 billion (An 2011).
In contrast, in China itself, M&A accounted for only about 3 percent of the total amount of inward foreign direct investment (FDI) in 2010, while the global figure was 70 percent (China Post 2011). Three percent of the total means just a little more than $3 billion.
Chinese acquisitions of large Western companies ...
