China’s corporate and private equity firms are making a strong return to overseas mergers and acquisitions (M&A), signaling a revival of cross-border investment after several slow years. A series of high-profile deals in Europe highlights the renewed appetite for strategic international expansion.
Chinese Companies Eye European Consumer Brands
Lenders are preparing to finance Anta Sports Products and Li Ning in potential bids for Germany’s struggling Puma, while Chinese private equity firm Centurium Capital, a major shareholder of China’s largest coffee chain Luckin Coffee, is reportedly considering a takeover of UK-based Costa Coffee valued at around US$1.3 billion.
Meanwhile, HongShan Capital (formerly Sequoia China) is raising funds from Shanghai Pudong Development Bank to acquire Bayer’s Avelox antibiotics business in Germany, valued between €160 million and €260 million, and is exploring a €2.5 billion bid for Italian luxury sneaker brand Golden Goose.
Favourable Financing Policies Drive Outbound M&A
Several policy changes have made it easier for Chinese firms to fund overseas acquisitions. The Lingang New Area policy in Shanghai allows banks to provide loans for cross-border deals with more flexible conditions, including an 80% loan-to-value ratio (up from 60%) and maturities of up to 10 years (previously seven).
Additionally, the National Financial Regulatory Administration has relaxed rules on acquisition financing, giving Chinese buyers low-cost, long-tenor funding.
“Regulators have become more supportive of strategic overseas acquisitions,” a Chinese loan banker said. “This flexibility gives Chinese bidders a competitive edge, enabling faster execution and the ability to act swiftly.”
Strategic sectors such as high technology, energy security, and Belt and Road Initiative projects can also secure preferential financing, giving Chinese investors greater certainty and speed in executing deals.
European Assets Offer Attractive Opportunities
European companies are currently trading at lower valuations due to slow growth, aging populations, and geopolitical uncertainty. This environment is creating opportunities for Chinese investors to acquire established brands at discounted prices.
For example, the potential Costa Coffee acquisition could value the UK chain at approximately £1 billion, roughly a quarter of the £3.9 billion Coca-Cola paid in 2018. Centurium Capital may partner with Luckin Coffee to leverage its strong balance sheet and credit profile, enabling greater financing flexibility.
Similarly, Puma’s valuation has nearly halved this year amid competitive pressures and weak consumer demand. Acquiring the German brand would allow Anta and Li Ning to expand globally while providing Puma with growth potential in Asian markets.
“This devaluation, combined with Puma’s strong brand heritage, presents a rare chance for Chinese buyers to invest at a temporarily depressed price,” a Chinese banker said.
Consumer Sector and Tech Deals Lead the Charge
International lenders are showing keen interest in consumer-sector acquisitions due to resilient cash flows and stable profitability. For instance, JD.com is acquiring German electronics retailer Ceconomy, tapping a €1.23 billion bridge loan from HSBC and Standard Chartered.
Earlier, HongShan Capital raised a €415 million term loan to acquire Swedish audio equipment maker Marshall Group, underscoring growing confidence in outbound investment.
Shift in Chinese Outbound Strategy
According to official statistics, China’s outbound direct investment rose 6.2% year-on-year to US$144 billion in the first 10 months of 2025. Completed outbound M&A deals reached US$22.36 billion, up 33% year-on-year, with European targets accounting for 43% of total deal value—surpassing the Americas as the leading destination.
Unlike earlier waves targeting natural resources and infrastructure, the current surge focuses on soft-power sectors, including consumer brands, sportswear, and food and beverage. European consumer and retail assets offer established brands, loyal customers, and global supply chains, all of which can be integrated into China’s growing consumer and digital ecosystem.
“Acquiring well-known Western brands brings instant brand prestige and global supply chain access,” a senior loan banker noted. “These are assets that can be revitalized within China’s dynamic market.”
Looking Ahead
China’s outbound M&A revival reflects a strategic approach: leveraging policy support, favorable financing, and undervalued European assets to expand global influence. With strong government backing and a focus on consumer and tech sectors, Chinese companies are poised to strengthen their international presence while maximizing long-term growth opportunities.