“Last year Chinese firms bought lots of football clubs overseas. If these purchases help improve the standard of Chinese football, then I think that’s a good thing,” Pan opined.
“But is that what’s really happening? A lot of Chinese companies already have high levels of debt and then borrow another large sum to make overseas purchases. Others pretend to be investing but are actually just moving their assets,” he asserted.
After a notable jump in cross-border acquisitions out of China in 2015, last year also saw intense levels of activity with the volume of Chinese acquisitions growing by over 30 percent into the U.S., 215 percent into the U.K. and almost 250 percent into Germany, according to research from M&A advisory firm, Livingstone.
Despite the apparent pullback and ongoing pressures for further caution, advisors at Livingstone see continued growth in outbound acquisitions, tempered by political dynamics in the target countries.
“Transaction flow between China and Europe is expected to grow even stronger, as the relationship between the U.S. and China is increasingly stressed by announcements from the Trump administration,” said Baoshan Bao, managing director of Livingstone China, in the company’s latest report looking at global M&A trends.
