Chinese firms spurned U.S. acquisitions in both 2017 and 2018, indicating sentiment had soured before the current trade war.s
Chinese investors may well have exhibited divine foresight, spurning American acquisitions before the current trade war between two of the world's largest economies. According to data released by global M&A research provider, Mergermarket, 2016 may well have been the peak for Chinese investments into the U.S. with as much as $55.3 billion dollars being spent by investors eager to acquire American businesses.
The Anbang Group, Dalian Wanda and HNA were the most aggressive buyers and collectively snapped up marquee assets in many industries, including the iconic Waldorf-Astoria in New York which came to Anbang Insurance as part of its purchase of Starwood Hotels.
Dramatic Declines
But those days seem to be well and truly in the past with two consecutive years of dramatic declines in investor interest. In 2017 Chinese money accounted for $8.7 billion and just $3 billion in 2018. But this does not mean Chinese investors get wary of international acquisitions – on the contrary.
Chinese acquisitions in Europe increased by an impressive 81.7 percent during the same period. Investors once again gunned for marquee assets, this time in The City of London and Canary Wharf. They also spanned the arc of industrial activity, including stakes in mining major Rio Tinto, Swiss pesticide maker Syngenta, Mercedes-Benz owner Daimler, Italian tyre maker Pirrelli and at last count, half a dozen football teams.
Specific Scepticism
The U.S. government's increased scrutiny of acquisitions mounted by Chinese companies as well as the Chinese government's efforts to stem the flight of capital have both contributed to the reduced M&A activity as has specific scepticism regarding the future of bilateral relations between the two powers.
