The run by foreign investors on german companies continues. However, interest from chinese companies has dropped significantly. This is according to data from the consulting and auditing firms EY and pwc.
According to EY, there have been 34 acquisitions or investments by companies from china this year, as the "frankfurter allgemeine zeitung" reported on thursday. That is the lowest value in five years and a halving compared to the peak in 2016. Last year, there had been 54 transactions, according to EY, compared with 68 in 2016.
Overall, however, german companies continue to be sought after by foreign investors. Pwc expects 815 to 850 transactions for the year as a whole. By mid-november, 732 announced deals had been paid for by companies and financial investors from abroad. As in previous years, most of the buyers came from the USA (129 deals). By mid-november, great britain was in second place with 94 deals, followed by switzerland with 86 transactions. Financial investors handle more than one in three deals, according to the report.
"Of course, the relative attractiveness of german companies is also based on the problems in other european locations – i.E. First the debt crisis in southern europe and then the brexit vote in the uk," explained pwc expert steve roberts. In addition, german companies were considered to be solidly positioned among foreign investors.
However, according to EY, chinese companies’ interest in german companies was not allowed to increase for the time being. "We expect the number to stabilize in the coming year," yi sun, the ey manager responsible for the china business, told the "frankfurter allgemeine zeitung" newspaper. "It will be a while before we see a slight increase again."
According to preliminary data, the transaction volume fell from around $13.7 billion last year to just over $10.2 billion in 2018. More than 8 billion dollars were invested in daimler by li shufu, owner of the chinese carmaker geely, alone.
Shortly before christmas, the federal government had raised the hurdles for foreign investors to protect against espionage and intellectual property. With a change to the aubenwirtschaftsverordnung, the cabinet lowered the threshold for sensitive areas above which the federal government can review an acquisition of shares by an investor. This refers to investors outside the european union. Even though the federal ministry of economics emphasized that "it is not a lex china," recent attempts by chinese investors to enter the market have given the federal government cause for concern.