亚洲科技投资者对欧洲投资报告（英文）-40页-2mb

Summary of ASIAN: Horizons - GP.Bullhound Dealmakers in Technology

Core Content

This document explores the growing trend of Asian buyers acquiring European technology companies, highlighting the dynamics, key sectors, and strategic synergies involved. It also includes case studies and insights from industry experts.

Main Points

• Growth in Asian M&A Activity:

  • Asian acquisitions of European tech companies more than doubled from 2014 to 2016, increasing from 22 to 49 deals, with a deal value increase of 30 times to $50.4bn.
  • The total value of Asian-to-European M&A from 2014 to 2017 was $61.0bn, with 119 transactions.
  • The US remains the largest acquirer of European tech companies with 210 deals in 2016.

• Key Buyers and Targets:

  • Japan and China are the dominant players in Asian M&A, accounting for 67% of the deals and 97% of the disclosed value.
  • China has led in deal volume, responsible for 7 of the top 10 Asia-to-Europe deals since 2014.
  • The UK is the primary target for Asian buyers, with 30 deals and a disclosed value of $37.4bn, followed by the Nordics with 20 deals and $13.5bn.

• Tech Sectors of Interest:

  • Software is the most active sector, accounting for 63% of transactions.
  • Semiconductors, eCommerce, Gaming & Visualisation, and Digital Services are also highly sought after.
  • FinTech is an exception, with low Asian interest due to differing consumer needs and the strength of homegrown Asian fintech firms.

• Strategic Drivers:

  • Access to markets: Asian buyers seek European brands and technologies to expand into their domestic and international markets.
  • Complementary skills and innovation: European and Asian companies collaborate to enhance innovation, diversify workforce, and improve operational efficiency.
  • Supply chain and domain expertise: Consolidation of expertise and supply chains is a key factor in M&A decisions, especially in fast-evolving sectors like IoT and Automotive.

Key Insights

• Softbank's Impact:

  • Softbank's $30.2bn acquisition of ARM Holdings and its $93bn Vision Fund significantly influenced the Asian-to-European M&A landscape.
  • Softbank's strategic bets have demonstrated a willingness to take large risks and acquire high-value European assets.

• Chinese Outbound M&A Regulation:

  • Tightened capital controls in China have slowed the pace of outbound M&A, but the trend is expected to continue as it aligns with China's Digital Economy strategies.
  • Chinese buyers are interested in European companies with Intellectual Property, Customer Base, and Brand value.

• Case Study: Thundersoft and Rightware:

  • In 2016, Thundersoft acquired Rightware for €68m.
  • The deal allowed Rightware to expand from a technology supplier to a provider of a fully customisable software platform.
  • Cultural and regulatory challenges were addressed through face-to-face engagement, local partnerships, and adaptation to Asian practices.

• Skyscanner's Asian Expansion:

  • Skyscanner expanded into the Japanese and Chinese travel markets, which provided significant growth opportunities.
  • The company was acquired by Ctrip, highlighting the strategic interest in European tech for Asian markets.

• GP Bullhound's Role:

  • GP Bullhound advises European tech companies on M&A and investment, emphasizing the importance of local knowledge and global perspectives.
  • The firm has established its first Asia office in Hong Kong to better serve the growing interest in the European tech landscape.

Challenges and Opportunities

• European Tech Ecosystem:

  • The European tech ecosystem faces challenges in catching up with the US and Asia in building billion-dollar companies.
  • There is a need for balance between international investment and maintaining talent, intellectual property, and value within Europe.

• Policy and Regulatory Considerations:

  • European policymakers face the challenge of managing foreign investment while supporting the growth of domestic tech firms.
  • The debate around market barriers is ongoing, with some suggesting that a more open approach to international capital is beneficial.

• Cultural and Regulatory Adaptation:

  • Cultural differences and changing regulations in China require European companies to adapt their strategies and build local relationships.
  • Face-to-face meetings and understanding local business practices are crucial for successful M&A in Asia.

Conclusion

The Asian-to-European M&A trend is driven by strategic interests, technological convergence, and the desire for market expansion. Despite regulatory challenges, the growth of China's digital economy and the strong presence of Japanese firms like Softbank continue to fuel this activity. European companies that can leverage complementary skills, market access, and global collaboration stand to benefit significantly from these cross-border deals.