HomeWorld NewsGrowing Appetite: What’s Behind China Acquiring Companies Across the World

Growing Appetite: What’s Behind China Acquiring Companies Across the World

China is actively acquiring Swiss companies. Hainan Airlines, Asia’s fourth-biggest airline, has agreed to buy Swiss airline catering company Gategroup for $1.5 billion.

In February, China outdid itself in Switzerland in its acquisition of overseas companies. China National Chemical Group bought Swiss company Syngenta, one of the world’s leading agrochemicals producer, for $43 billion.

Both deals have been approved by shareholders and will soon be closed. Like in the case of Syngenta, Hainan Airlines will pay more than its current price for each Gategroup share. The Chinese company will pay nearly $56 per share, valuing the Swiss company at about 20 percent more than Friday’s closing price.

Right after the deal was announced Syngenta shares jumped 15.5 percent, amid a drop in the main index of the Swiss Stock Exchange. According to Bloomberg, that was the biggest one-day gain in the company’s value since 2009.

Last year, Chinese companies set a record in buying companies abroad, with a total of 607 deals worth $112.5 billion. But this year China is expected to break this record. In January alone, Chinese companies announced 82 merger and acquisition deals in different countries, with a total worth of $73 billion. In last January, 55 deals were announced, with a net worth of $6.2 billion.

The string of deals is taking place amid growing concerns over China’s economic outlook. Western analysts say that growth will slow down and Beijing will not be able to avert a “hard landing.”

At the same time, the rising number of acquisition deals by Chinese companies makes the negative outlooks unviable, Yakov Berger, an analyst at the Far East Institute of the Russian Academy of Sciences, told Sputnik.

“Of course, there will be no collapse in the Chinese economy until Beijing expands the foreign market for its goods and buys foreign companies. This means that China is set for stable growth. Chinese companies plan to buy foreign brands in all industries and invest their growing assets abroad,” Berger said.

According to the expert, currently Beijing tries two combine two different strategies to maintain growth, in both the short-term and long-term. The purchase of global brands is part of the short-term strategy. The other strategy requires the creation of domestic brands.

Running domestic brands requires the development of domestic technologies and R&D.

SPUTNIK NEWS REPORT HERE

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Dina Amelia Kalmeta is the Founder and CEO of Your New Life in Christ Ministries - CWW7NEWS. Dina reports on world events as they pertain to Bible Prophecy. Before Your New Life in Christ Ministries, Dina served as a Leader for INCHRIST NETWORK leading teams online and spreading the Gospel of Jesus Christ. Her mission today is to bring hard evidence that what is taking place in the world isn't just coincidence, but indeed proof that the last days the Bible warned us about are upon us right now.
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