By Aaron Back
BEIJING--Chinese investment in Europe surged in the second
quarter, according to a survey by private equity firm A
Capital.
China's total outbound direct investments in the three months
ended June 30, including mergers and acquisitions as well as
greenfield investments, rose by 67% from a year earlier to $24
billion, A Capital said in its quarterly Dragon Index report issued
Tuesday.
At the same time, mergers and acquisitions by Chinese companies
in Europe rose by 95% from year earlier, the report said.
"Investment in Europe should continue strongly as the market
remains very open for Chinese investments, valuations are
reasonable, and Chinese companies need to move strategically to
improve their value-added in terms of technologies, brands and
access to customers," A Capital said in a statement.
A Capital is a private equity firm that specializes in helping
Chinese companies invest abroad. In July, A Capital invested
alongside Chinese luxury goods distributor Sparkle Roll Holdings
Ltd. to take a minority stake in Danish electronics maker Bang
& Olufsen A/S (BO.KO).
China's global hunt for raw materials continued to be the
leading factor in its overseas investment in the second quarter,
accounting for 53% of all overseas deals. Prominent transactions
included the takeover of Australia's Gloucester Coal Ltd. by
Yanzhou Coal Mining Co. (1171.HK).
But in other sectors, Europe was the main destination,
accounting for 95% of Chinese companies' non-resource deals. In the
largest deal of the second quarter, China Three Gorges Corp. took a
21.4% stake in Portuguese power supplier EDP-Energias de Portugal
SA (EDP.LB) for $3.5 billion.
Overall, Europe was the largest destination for mergers and
acquisitions by Chinese companies in the second quarter, accounting
for 48% of the total by deal value.
For the first half, Chinese mergers and acquisitions in Europe
rose by 58% from a year earlier to $7.0 billion, and accounted for
31% of total deal value.
Write to Aaron Back at aaron.back@dowjones.com