Fosun International expands asset portfolio in Portugal

China has, without a doubt, been the biggest foreign investor in Portugal in recent years and 2014 seems to be the year of Fosun International, with the expansion of business in the insurance sector into health and infrastructure.
The next deal is expected to be the acquisition of Espírito Santo Saúde (ES Saúde), for which the Chinese group has proposed to pay almost USD600 million, which is more than the amounts offered by Portugal’s Mello group, Mexican group Ángeles and Brazil’s Amil Participações, controlled by US group UnitedHealth, which eventually gave up on the deal.
The offer from Fidelidade, the insurer that Fosun International bought in early 2014 from Portuguese state banking group Caixa Geral de Depósitos (CGD), of 4.82 euros per share, was accepted by ES Saúde’s management team and shareholders are expected to announce their opinion by 10 October.
Fosun’s winning bid for Caixa Seguros was 1 billion euros, along with an expansion plan, supported by strong financial availability, based on shareholder equity, which amounted to 150 percent of the figure offered, or 1.5 billion euros in cash.
The Portuguese media reported that Fosun recently expressed told the Board of the Port of Lisbon that it was interested in investing in the capital’s port activity, particularly in the exploration of the future container terminal in Barreiro and future marina on the Tagus River.
Alongside this Fosun has been investing in shares of national power grid company Redes Energéticas Nacionais (REN), whose main shareholder is China State Grid, and now owns 5 percent of the company.
State Grid is now considering taking a stake in Portuguese electrical engineering group Efacec, which is undergoing restructuring, a process that will end with the entry of an international partner.
After setting up a strategic partnership between the two countries, China began a series of major investments in Portugal involving large public companies.
The acquisition of Fidelidade was another step in the series of investments made by Chinese companies, which reached its highest point when China Three Gorges paid 2.7 billion euros for a stake in Energias de Portugal (EDP), making it the largest shareholder in the company, which has a strong presence in South America and North Africa.
Recently multinational group Veolia also sold its water business in Portugal to Beijing Enterprises Water Group for 95 million euros.
According to weekly newspaper Expresso, recent Chinese investment in Portugal totals 5 billion euros making China the largest foreign investor in the country.
The Portuguese press has also reported on the interest of Chinese investors in Banco Espírito Santo Investment, another subsidiary of the beleaguered Espírito Santo Group.
Chinese industrial companies have also chosen Portugal to establish production bases as in the cases of the new industrial units of Wuhan Zhongye (molds), and 360 Steel Materials, a partnership between Portugal’s Metal Rolo and steel manufacturer Zhejiang Huadong.
These recent investments in product processing or finishing in Portugal frequently target access to the European market, but also the connection to the USA and Brazil. MDT/Macauhub