China leads acquisitions in Portugal, Brazil tops by total investment

Billionaire Guo Guangchang, chairman of Fosun International Ltd., speaks during a news conference in Hong Kong

China is at the top of mergers and acquisitions this year in Portugal, Brazil leads by total investment in the country and Angola has tripled the amount invested at a time of great change in the Portuguese business sector.
Figures from Portugal’s trade and investment promotion agency AICEP and the Bank of Portugal put Brazil in first place in the first seven months of the year, having invested around 3.552 billion euros, or 35 times the total for the same period of last year, an investment have largely been included by the Portuguese central bank in the telecommunications category.
Daily newspaper Público said that the merger of telecommunications companies Oi and Portugal Telecom (PT), which in recent months has experienced major upheavals, involved several transfers of capital between the two companies, in both directions, although this does not explain the total influx.
Along with the Oi process is the acquisition of the Brazilian cement company Cimpor by Brazil’s Camargo Corrêa, the industrial investment of Brazilian aircraft manufacturer Embraer in Portugal and the purchase by Amil of the hospitals owned by HPP Saude.
In a climate in which investments from traditional markets such as Spain, France and Germany is retreating, and attracting foreign investment is crucial for Portugal to leave the crisis of recent years far behind it, China’s investment is also among the countries that saw greatest investment growth in July, more than 20-fold, to 283 million euros.
Over the past three years, Chinese companies have invested 5.65 billion in mergers and acquisitions of Portuguese companies, or about 40 percent of the total.
The bulk of Chinese investment went to the power sector, with an investment of 3.43 billion euros to buy a stake in electricity company Energias de Portugal (EDP), national grid company Redes Energéticas Nacionais (REN) and acquisition of the assets of EDP Renováveis.
After EDP, the acquisition of insurer Fidelidade by Fosun International was the second largest deal involving investment of 1.635 billion euros.
Earlier this month, Fosun International invested over 478.5 million euros via Fidelidade to buy Espirito Santo Saude (ES Saude).
In the wave of mergers and acquisitions that Portugal has experienced since the 2011 financial crisis and subsequent economic bailout, many Angolan companies have taken the opportunity to strengthen their investments, particularly in banking and telecommunications.
According to a recent study by business school AESE – Escola de Direcção e Negócios, “recent Chinese investments in major companies, such as EDP and REN, along with strong support from Chinese financial entities, the purchase of the insurance business of Caixa Geral de Deposits by Fosun and installation of the Bank of China, the Industrial and Commercial Bank of China and Huawei in the country, show that China is increasingly becoming a significant partner in attracting foreign investment in Portugal.”
The study, entitled “Internationalization and Foreign Investment as Engines of Growth,” also said that Portugal’s competitiveness “increased dramatically” with the “perception of businesspeople and senior managers” in this regard improving in 2013, “after several years of precisely the opposite results.”
The work carried out by AESE also states that “the amount and nature of foreign investment have contributed to improving the national situation in terms of innovation, particularly by enriching the technological content and the level of knowledge incorporated into products, thus promoting increased exports.”
In line with the recent trend, Angola’s investment in Portugal has tripled this year to 123 million euros.  MDT/Macauhub