Chinese hungry for Yorkshire M&A

CHINESE companies are seeking to make the most of current market turmoil, with almost two thirds planning to buy over the next two years, according to research.

A recent study by business advisory firm Deloitte of companies attending special events for Chinese executives in London showed that the majority have not completed acquisitions before.

However, more than 60% intend to look at acquisition opportunities while 33% are planning large strategic deals. Nearly 30% are looking for bolt-ons.

The research highlighted Europe as the preferred region for M&A investment with the UK a favourtie for purchases.

Richard Williams, corporate tax partner at Deloitte in Leeds, said: “It’s clear that Chinese buyers are likely to be keen acquirers of UK businesses over the coming years.

“When we asked clients what the drivers behind their interests are, the desire to acquire brands and technology ranked highly, alongside the obvious benefits of growing turnover through geographical expansion. While many other buyers have lost their taste for deal making, the Chinese remain hungry.”

Mr Williams added that there had already been a number of acquisitions by Chinese companies in the region, albeit on a relatively small scale to date.

But he said that their appetite was clearly high for UK acquisitions.

“Buyers still have a number of concerns – understanding the legal and tax frameworks in the destination country are at the top of the list,” he added.

“Our view is that with proper advice, these issues can be overcome and good deals can be struck.”

Lawrence Jin, Chinese services group partner at Deloitte said: “Chinese companies are increasingly keen to buy and will brave the capital markets to fund acquisitions.

“Given the depreciation of sterling and low equity values, we expect a significant increase in Chinese backed deals in the coming months.”