BusinessCorporate FinanceUK businesses establishing foothold in China

UK businesses establishing foothold in China

Heavy investment in Chinese companies in last year

The UK, along with the US, Hong Kong and Singapore, is leading the charge by
foreign investors buying in to Chinese companies, with more than 250 acquired
over the last year, at a cost of $14bn (£7.4bn).

Despite lagging behind in terms of the overall number of Chinese deals, the
UK is proportionally buying the highest value assets by a wide margin having
spent $3.5bn on Chinese investments in the last year compared to the US which
has spent $5bn on almost four times the number of transactions.

However, according to research by Grant Thornton, the rate of inward M&A
activity appears to be static due to regulatory and often cultural issues.

In the 12 months to 30 June 2006, a total of 266 foreign companies (worth
$14bn) from 41 different countries bought a Chinese company, almost exactly the
same number as the previous 12 months (268) although there was a 52% increase in
deal value terms (from $9bn to $14bn).

The UK accounted for 6% of these deals with the biggest investor being the US
(23%) followed by Hong Kong (19%).

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