'From Gold Mines to Puma and Blue Bottle': Chinese Giants Reach 5-Year High in Overseas M&A

14 Trillion Won in Q1

Growth Continues for Five Consecutive Quarters

In the first quarter of this year, overseas mergers and acquisitions (M&A) by Chinese companies reached their highest level in five years.

According to the U.S. market research firm Rhodium Group on May 7 (local time), the total value of overseas M&A deals by Chinese companies in the first quarter of this year reached $9.6 billion (approximately 14.0563 trillion won), marking the fifth consecutive quarter of growth.

Puma logo. Photo by Reuters Yonhap News

The largest deal this quarter was Chinese mining company Zijin Mining's acquisition of Canadian gold mining giant Allied Gold for 5.5 billion Canadian dollars (about 5.8958 trillion won). Allied Gold owns gold mines in Mali, Côte d'Ivoire, and Ethiopia. In recent years, Chinese companies have been pursuing M&A in Southeast Asia and Africa to secure resources and diversify supply chains.

Overseas M&A activity is also brisk in the consumer goods sector. In January, Chinese sportswear company Anta Sports became the largest shareholder of German sports brand Puma by acquiring a 29% stake for 1.5 billion euros (about 2.576 trillion won). Additionally, in March, Centurium Capital, the investment and operating company of China's largest coffee chain Luckin Coffee, signed a contract to acquire all global stores of U.S. coffee brand Blue Bottle from Nestlé for around $400 million.

Ines Lam, an economist at HSBC, analyzed, "Chinese companies are looking overseas to leverage their massive trade surplus and overcome ongoing domestic demand weakness. Overseas direct investment by China is becoming an unstoppable trend." She further explained regarding the establishment of overseas production bases, "It also helps China respond to rising trade barriers."

As Chinese companies actively engage in overseas M&A, resistance from various countries is also growing. The UK government dismissed an appeal by China's JAC Capital after ordering it to sell its 80% stake in semiconductor company FTDI. In Belgium, military intelligence authorities are investigating the acquisition of domestic helicopter operator NHV by Irish company GDHF, which is owned by China's GDAT. Authorities believe that if the deal goes through, Chinese capital could gain access to military and energy infrastructure.

This content was produced with the assistance of AI translation services.