Dalian Wanda bought AMC for US$2.6 billion
According to a recent report, Chinese firms are snatching up US companies at a record pace in 2012, with investment already reaching US$8 billion this year.
The increase in purchases is seen as a result of the ongoing depression in US real estate prices and the stress that America’s prolonged downturn has had on many corporations.
Also, for many Chinese firms, the shift away from their home country’s rapid real estate and export-fueled expansion has made them eager to grasp investment opportunities outside of China.
The report in the Los Angeles Times cited investment by Chinese companies in a number of areas of the US economy, including natural resources, entertainment and auto parts as major components in the surge in M&A.
In April, China’s Sinopec, bought a one-third stake in Devon Energy of Oklahoma City for US$2.5 billion. Also this year, real estate conglomerate Dalian Wanda acquired US theater chain AMC Entertainment for US$2.6 billion.
And during this month China’s Wanxiang Group — a leading auto parts maker — announced that it plans to buy into struggling battery maker A123 Systems of Waltham, Mass in a deal which could potentially provide it with a majority stake in a state of the art producer of electric car batteries.
While the investments by Chinese firms into the US during 2012 is likely to double the US$3.85 billion invested during 2011, as measured by the research firm Dealogic, the record for Chinese capital inflows into the US occurred in 2007 when such purchases reached US$9 billion.
Dealogic’s figures do not include Chinese purchases of American bonds, private real estate purchases and many smaller acquisitions.
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