Midea , a $58 billion Chinese white goods champion, made waves in Europe in 2016 when it bought German robot maker Kuka for nearly $5 billion. Seven years later, the company is eyeing Sweden’s home appliance brand Electrolux , a complementary asset currently worth around $7 billion including debt. A successful tilt could mark the beginning of a revival in outbound M&A by Chinese firms after offshore deals touched a historic low of $29 billion in 2022, per EY estimates.
On the other hand European governments are even more sceptical of acquirers from the People’s Republic these days, and Chinese officials, worried about debt and capital flight, have tightened control of overseas investment too.
Global competition authorities will also take an interest. Nevertheless, it seems likely that more cash-rich Chinese companies like Midea, seeking to hedge weak domestic demand with overseas customers, will gingerly test cross-border M&A markets this year.
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