A recent study revealed that Chinese investors are buying more than other large heavily indebted investors abroad, according to the Gulf Economic Newspaper.
The study, conducted by the German Ifo Institute, showed that among the more than 70,000 acquisitions made since 2002 in 92 countries, Chinese investors acquired 1,900 companies, Among them are 171 German companies.
According to the institute’s data, companies that were bought by Chinese investors, on average, increased seven times in size compared to companies bought by investors from other countries.
The study indicated that the debt rate of companies acquired by Chinese is 6.5% higher, and that the average profitability at the time of conclusion of acquisitions was almost zero, while it was Investors from other countries are focusing on companies with positive returns.
She explained that the Chinese investors ’preference for purchasing heavily profitable low-profit companies could be explained by the long-term investment horizon or the possibilities of improving financing through Chinese government banks.
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