Chinese takeovers in Europe

Chinese companies have made notable acquisitions and investments in European technology firms.

In 2016, Chinese tech giant Tencent bought a majority stake in Finnish mobile games maker Supercell and Midea, a Chinese electrical appliance manufacturer, bought German robotics firm Kuka. And last year, Ant Financial, the financial technology affiliate of Alibaba, bought U.K.-based currency exchange WorldFirst.

But scrutiny of Chinese takeover attempts have increased recently, particularly in the U.S. through the Committee on Foreign Investment in the United States, or CFIUS.

It has blocked Chinese companies that attempt to acquire American firms, especially those seen in key technology areas. One example was in 2018, when CFIUS blocked American semiconductor testing company Xcerra’s takeover by China’s Hubei Xinyan.

And in January, CFIUS gained increased powers to scrutinize deals for national security threats.

That heightened worry about Chinese acquisitions is now playing out in Europe.

Margrethe Vestager, the European Union’s (EU) competition commissioner, suggested in an interview with the Financial Times that was published on Monday, that countries should consider taking stakes in companies to fend off the threat of a Chinese takeover.

“We don’t have any issues of states acting as market participants if need be — if they provide shares in a company, if they want to prevent a takeover of this kind,” Vestager said.

Against this backdrop is the U.S.-China trade war, which is also a battle over technological supremacy, that has been playing out. At the heart of it is who will dominate the next generation of technologies, such as 5G and artificial intelligence.

Source: https://www.cnbc.com/

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