RMB Devaluation Pushes Overseas Mergers And Acquisitions To Expand Overseas Market

The devaluation of the renminbi and the strength of the US dollar are deeply affecting the whole world.

And the profitability of fashion companies, which also gives Chinese companies the opportunity to acquire overseas.

Recently, the Shanghai based investment company Fosun Group has invested in the French fashion brand IRO for the next time in the field of clothing, and the paction is close to completion.

According to sources, Fosun Group plans to accelerate the globalization process of IRO after joining the stock market. IRO will further accelerate the expansion of the Asian market, especially the Chinese market, after the acquisition of Fosun international.

It is understood that Fosun Group has expanded its business scope in recent years, spanning real estate development, pharmaceuticals, steel and retail services.

So far, Fosun and its management fund have invested in many overseas fashion and lifestyle brands, including jewelry watch brand FolliFollie, American women's wear brand St.John, Italy Gao Ding men's wear Caruso, fashion brand TomTailor and so on.

In fact, not only is Fosun Group, but it is not uncommon for Chinese companies to acquire foreign high-end fashion brands in recent years.

In January of this year, Shenzhen women's costume, after purchasing the German dress brand Laur L, bought the US tidal brand EdHardy for 240 million yuan. In April this year, the local textile enterprise Shandong Ruyi chose the SMCP of the French light luxury clothing group, and in May, Hongkong luxurious fashion.

Bluebell group announced that it has acquired a large stake in Carven, a French high-end fashion brand.

Since 2015, Chinese fashion companies and capital have acquired billions of dollars in overseas fashion brands, and the paction volume is the highest in recent years.

In this regard, SamsonLo, head of Asian mergers and acquisitions in UBS, said: "the trend of the renminbi is an important driving force for overseas acquisitions of Chinese enterprises, because they are worried about the longer-term prospects".

Some analysts say that the global economy is slowing down, and foreign luxury and fashion brands are facing unprecedented pressure on performance. In addition, the devaluation of the renminbi and the strength of the US dollar are stirring up the profits of the global luxury and fashion companies. The performance of some companies has declined sharply, which has created new opportunities for mergers and acquisitions in China and some emerging market enterprises.

But at the same time, there are risks in overseas mergers and acquisitions.

Analyst Zhao Pei told the Beijing daily news that Chinese enterprises should pay attention to the true value of these enterprises or brands when choosing overseas acquisitions.

A lot of enterprises are losing money. If they invest blindly, they will easily fall into the trap.

In addition, the business philosophy of an enterprise is also important. After the acquisition is completed, we must see the future and trend of industrial development.