Strategic Investments

Germany’s China Syndrome

APP China getty nikolas Janitzki HB
China is gobbling up companies in Europe. Getty/Nikolas Janitzki HB
  • Why it matters

    Why it matters

    Many Western companies fundamentally fear doing business with China, citing intellectual property theft and workforce concerns but many Chinese-German M&A’s have been largely happy ones.

  • Facts

    Facts

    • Beijing’s stated strategic goal is to transform its companies from workbenches of the world into leading suppliers of advanced technologies in the next five years.
    • Chinese companies spent around €20 billion on acquisitions or stakes in European companies and the trend shows no signs of stopping.
    • Chinese companies have invested nearly $3.2 billion into 12 German companies so far this year, far outbidding their international counterparts.
  • Audio

    Audio

  • Pdf

A telephone rather than a doorman greets visitors at the entrance of German piano manufacturer Schimmel in Braunschweig, in the state of Lower Saxony. Next to it is a list of extensions that includes the number for Hannes Schimmel-Vogel, president of the 131-year-old company.

When visitors dial the number, Mr. Schimmel-Vogel asks them to come to a modest conference room furnished with the kind of metal frame chairs that were modern in the 1990s.

The Schimmel family has never been one to spend lavishly on self-promotion. Several weeks ago, family members sold their tradition-steeped piano business to Pearl River of Guangzhou, China. The world’s leading piano producer manufactures approximately 130,000 units per year, compared to 2,500 for Schimmel, Europe’s leading manufacturer.

Though just a small player in the global market, Schimmel finds itself right in the middle a growing global trend: China is on buying spree.

For years, Chinese companies have been seeking to parlay their export-driven earnings into overseas acquisitions. Until recently, their interest in German companies had been more rumor than real.

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