China Is Snapping Up Overseas Assets Again From Puma to Metals

2y{iqa3j2ljrs93]9ib1[4rc_media_dl_1.png Bloomberg

Article content

(Bloomberg) — After Beijing slammed them shut about a decade ago, the gates have flung open again for Chinese firms to go on overseas acquisition sprees. 

Article content

In January alone, the volume of outbound mergers and acquisitions from Greater China approached $12 billion, the most for the first month of a year since 2017. The shopping list included high-profile names like German sports brand Puma SE and Canadian miner Allied Gold Corp.

Article content

Article content

Article content

The turnaround is gathering momentum after a prolonged lull that began in the mid to late 2010s, when China capped outbound investment to rein in exuberant spending. One particularly high-profile case was HNA Group Co., which went on a debt-fueled international binge into names such as Hilton Worldwide Holdings Inc. and Deutsche Bank AG before collapsing.  

Article content

Article content

“We have seen a pickup in outbound M&A interest from China,” said Richard Griffiths, BNP Paribas SA’s head of M&A in Asia Pacific. “Many new situations are being evaluated at the moment and we expect more significant deals to be announced in 2026.”

Article content

Reasons for the shift include heightened competition and fewer opportunities at home, as well as renewed confidence and financial strength as local brands grow and Beijing gives its blessing to pursue strategic assets and M&A in key industries. Hurdles such as trade barriers still need to be negotiated though as some countries are more resistant and wary of Chinese investment.  

Article content

“We expect to see more Chinese companies buying assets overseas in markets with lower regulatory hurdles and industries that are less sensitive, including consumer and retail,” said Nancy Zheng, a partner at Bain & Co. in Shanghai. Other countries in Asia, Canada, some European markets and Latin America have welcomed Chinese buyers, she said.

Article content

Article content

China has significant control over Chile’s electricity market, for example, with China Southern Power Grid Corp. and State Grid Corp. of China both owning stakes in major power companies. China Southern Power has been trying to increase its 28% stake in Transelec SA in a $4 billion deal, people familiar with the matter have said, though a final agreement hasn’t yet been reached. 

Article content

On the consumer and retail side, Chinese market leader Luckin Coffee Inc., which has leapfrogged Starbucks Corp. at home, is considering acquisitions including Nestle SA’s Blue Bottle Coffee to elevate its international profile and expand in the premium coffee segment. The chain and its private equity owner Centurium Capital also contemplated a bid for Coca-Cola Co.’s Costa Coffee.

Article content

HSG, formerly Sequoia Capital China, is among a handful of bidders for Leica Camera AG, the German firm owned by Austrian billionaire Andreas Kaufmann and Blackstone Inc. Last year, HSG acquired Italian sneaker maker Golden Goose, as well as a majority stake in audio equipment maker Marshall Group AB. And FountainVest Partners bought a stake in Eurogroup Laminations SpA.