Chinese cross-border M&A into industrialized countries: the case of Chinese acquisitions in Germany

Chinese enterprises had established more than 25,400 entities in 184 foreign countries by the end of 2013 (Ministry of Commerce, 2014). In terms of outward foreign direct investment (OFDI), China ranks third worldwide, contributing a share of 8.6 per cent to worldwide OFDI, which highlights its growing importance as a foreign investor (UNCTAD, 2015). While the main target of Chinese OFDI is still South and East Asia (Ministry of Commerce, 2010; Morck et al., 2008), OFDI into industrialized countries is rapidly increasing. Cross-border mergers and acquisitions (M&As) accounted for 63.9 per cent of the total Chinese OFDI in 2013 (Ministry of Commerce, 2014), and are the most common ways of Chinese OFDI entering industrialized countries. As Chinese OFDI is increasingly motivated by the

FIGURE 5.1 Chinese outward foreign direct investment (OFDI)

procurement of intangible assets, M&As are a rapid and highly efficient route to increase knowledge and technology and to gain reputation through the acquisition of well-reputed brands.