64
has already almost doubled the total volume
achieved across the entire year of 2015 (ap-
proximately 40 billion USD)
14
.
Germany has become in 2016 the third largest
recipient of Chinese OFDI within the EU, fol-
lowing Luxembourg and the United Kingdom
15
.
As indicated by the data presented in Figure 4,
the volume of Mergers & Acquisitions has
grown exponentially since 2011, following a pe-
riod of intense Greenfield investment activity.
Investments in Germany tend to be mostly fo-
cused on industrial sectors, including industrial
machinery (69%), automotive parts and tech-
nology (33%), consumer goods (16%), alterna-
tive energy technology (14%) and pharmaceu-
ticals (13%).
16
In contrast, investments in the
United Kingdom focused primarily on the real
estate industry and energy sectors, with Lux-
embourg becoming a new star in recent years
ferred investment vehicles for Chinese inves-
tors interested in acquiring European as-
sets
13
. Recent data indicates that the volume
of investments in Europe will increase signifi-
cantly in the future. Passing 72 billion USD in
IFDI and OFDI deal volume in the first half of
2016, the deal value of mutual investments
The goal of this paper is to survey with 32 inter-
views, Chinese influence factors on M&A’s in
UK, Germany, France and the Netherlands. The
study at hand seeks to identify which factors
have contributed to the large number of M & A’s
between Chinese and German firms in the past
decade, most notably among Chinese compa-
nies and German Hidden Champions
8
.
With the realization of WTO bonus effect and
the strengthening of its RMB currency
9
, China is
on its way to transforming from an FDI recipient
into a net FDI capital provider, soon to become
a net credit country, as illustrated by Figure 1.
This will have a profound impact on the global
economic landscape, as China does already re-
places in volume of FDI classical developed
countries like Italy, France, Japan and Korea
10
.
Europe is particularly attractive to Chinese
companies pursuing an internationalization
strategy, primarily due to the economic bene-
fits of its single market and its single curren-
cy
11
. The lower market entry barriers and the
lack of severe political disputes between Chi-
na and the EU have furthermore helped at-
tract increasingly more investors from China
into EU countries
12
. As presented in Figure 2
and Figure 3, Europe has now become the
largest recipient of outbound M&A deals, sur-
passing even the Asian continent in terms of
deal volume. Due to major deals involving
companies such as Pirelli, SNS Reaal insu-
rance, Club Med, Louvre Hotels and NXP RF
Power unit, the Chinese OFDI deal volume
succeeded in surpassing 20 billion EUR in
2015. As demonstrated by Figure 5, Chinese
FDI into Europe has exceeded the European
FDI into China since 2010, with Mergers &
Acquisitions serving as the dominant and pre-
Figure 1: Total volume of yearly Chinese outward and inward FDI flow from 1978-2015 in $Million
19
Figure 2: Chinese outward M&A deal volume by destination in percentage
20
Figure 3: Chinese investments in the EU28 countries
21
Hidden Champions
