• Record $2.9 billion total; amounts to a rise of 29,260% in investment
  • Puts Ireland amongst the top 5 recipients of Chinese FDI in Europe

Chinese direct investment in Ireland amounted to almost US$3 billion in 2016, a new record and a huge increase from only  $10m in 2015, as China continues its transition to a more expansive growth model, in line with its rapidly maturing economy.

The scale of recent investment amidst a period of global uncertainty is revealed by data from  Baker McKenzie, which is unique in analyzing patterns of Chinese investment in both Europe and North America.

The unprecedented rise in investment into Ireland is largely down to the HNA Group's purchase of Irish aircraft leasing business Avolon, for US$2.5 billion. The deal, which closed in early 2016, saw Avolon become part of HNA's extensive interests in the aviation sector, spanning stakes in 20 airlines and nine airports in China.

Ireland's Energy sector also witnessed a significant boost in Chinese investment, with a $400 million investment from China General Nuclear Power’s European energy arm, into 14 Irish Wind Farms owned by Gaelectric.

Other sectors in Ireland to have received Chinese investment in 2016 were ICT ($121 million), Financial and Business Services ($26 million), Electronics ($10 million), Entertainment ($5 million), and Industrial Machinery and Equipment ($3 million).

Tim Gee, M&A partner from Baker McKenzie said,

"Ireland's surge in investment from China is indicative of a trend throughout Europe, as Chinese investors look to the transport, energy, ICT and industrial machinery and equipment sectors. We expect 2017 to be another strong year globally, as previously announced deals reach financial close, and protectionist rhetoric in some major markets could further boost the attractiveness of Ireland as an investment destination"

Overall, combined Chinese direct investment in the advanced economies of North America and Europe more than doubled in 2016 to a new record of $94.2 billion*. Deal making rose a combined total of 130% from the previous benchmark of $40 billion, set in 2015. Acquisitions drove activity, accounting for 97% of FDI value.

Record $2.9 billion total; amounts to a rise of 29,260% in investment
Puts Ireland amongst the top 5 recipients of Chinese FDI in Europe

Chinese direct investment in Ireland amounted to almost US$3 billion in 2016, a new record and a huge increase from only  $10m in 2015, as China continues its transition to a more expansive growth model, in line with its rapidly maturing economy.

The scale of recent investment amidst a period of global uncertainty is revealed by data from  Baker McKenzie, which is unique in analyzing patterns of Chinese investment in both Europe and North America.

The unprecedented rise in investment into Ireland is largely down to the HNA Group's purchase of Irish aircraft leasing business Avolon, for US$2.5 billion. The deal, which closed in early 2016, saw Avolon become part of HNA's extensive interests in the aviation sector, spanning stakes in 20 airlines and nine airports in China.

Ireland's Energy sector also witnessed a significant boost in Chinese investment, with a $400 million investment from China General Nuclear Power’s European energy arm, into 14 Irish Wind Farms owned by Gaelectric.

Other sectors in Ireland to have received Chinese investment in 2016 were ICT ($121 million), Financial and Business Services ($26 million), Electronics ($10 million), Entertainment ($5 million), and Industrial Machinery and Equipment ($3 million).

Tim Gee, M&A partner from Baker McKenzie said,

"Ireland's surge in investment from China is indicative of a trend throughout Europe, as Chinese investors look to the transport, energy, ICT and industrial machinery and equipment sectors. We expect 2017 to be another strong year globally, as previously announced deals reach financial close, and protectionist rhetoric in some major markets could further boost the attractiveness of Ireland as an investment destination"

Overall, combined Chinese direct investment in the advanced economies of North America and Europe more than doubled in 2016 to a new record of $94.2 billion*. Deal making rose a combined total of 130% from the previous benchmark of $40 billion, set in 2015. Acquisitions drove activity, accounting for 97% of FDI value.

Highlights in Europe

In Europe, Chinese investors focused on Germany and the UK, which between them saw 46% of all investment in Europe.

Germany saw inbound deals from China rise nearly tenfold, from $1.3 billion in 2015 to $12.1 billion last year. The UK attracted $9 billion of investment, an increase of 130% on 2015. The UK total was driven by deals announced prior to the EU referendum closing in the second half of the year, making it too early to judge the impact of Brexit.

Finland and Switzerland were also major recipients of Chinese FDI in 2016, attracting $7.6 billion and $4.8 billion  respectively. Switzerland would have been the largest recipient if not for pending regulatory approval delaying the closing of ChemChina's acquisition of Syngenta. Meanwhile, Italy, Portugal and France saw investment drop 85%, 50% and 40% in 2016 as Chinese investors focused on integrating large acquisitions they made in those countries in 2015.

In Europe, Chinese investors focused on Germany and the UK, which between them saw 46% of all investment in Europe.

Germany saw inbound deals from China rise nearly tenfold, from $1.3 billion in 2015 to $12.1 billion last year. The UK attracted $9 billion of investment, an increase of 130% on 2015. The UK total was driven by deals announced prior to the EU referendum closing in the second half of the year, making it too early to judge the impact of Brexit.

Finland and Switzerland were also major recipients of Chinese FDI in 2016, attracting $7.6 billion and $4.8 billion  respectively. Switzerland would have been the largest recipient if not for pending regulatory approval delaying the closing of ChemChina's acquisition of Syngenta. Meanwhile, Italy, Portugal and France saw investment drop 85%, 50% and 40% in 2016 as Chinese investors focused on integrating large acquisitions they made in those countries in 2015.

 

*Closed deals only; includes both acquisitions and greenfield investments; data from Rhodium Group unless otherwise indicated

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