Losses from China’s Overseas Takeover Binge Are Piling Up Fast
Chinese buyers have not only stopped snapping up iconic overseas assets, the coronavirus pandemic is ravaging the targets of deals that defined a headier era.
Whereas some prolific acquirers such asHNA Group Co. andAnbang Insurance Group Co. began falling into disarray before the recent crisis, the impact on investments in sectors hithardest by the outbreak means healthier owners are now feeling the pain.
Conglomerate Fosun International Ltd. could soon see its 2015 investment in Cirque du Soleil Entertainment Groupwiped out, while PizzaExpress, owned by private equity firm Hony Capital, said this month it’s likely tohand control of the British chain to creditors. Baggage handler Swissport International AG is alsonegotiating with investors over a rescue that could see HNA exit the cash-strapped firm it bought in 2015, Bloomberg News hasreported.
“Some of the Chinese overseas investments that have recently imploded are legacy acquisitions from the debt-fueled deal spree in the years before 2018,” Lars Aagaard, head of mergers and acquisitions and financial sponsors for Asia Pacific at Barclays Plc based in Hong Kong, said in a phone interview.
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