Attracting wealthy investors can be a challenge for companies and governments who are facing tough times. But when those investors are from China, showing them the door later can prove even harder.
Pirelli, the Italian tyremaker, sought succour from Chinese chemicals maker Sinochem a decade ago. It was by no means the only one. Chinese entities were voracious buyers around that period, spending not far off $700bn on outbound mergers and acquisitions between 2016 and 2021, according to Dealogic. Roughly a third of that was in Europe. That doesn’t include the $150bn of offers that were made and later withdrawn.
In some cases, that money comes with even more strings than first thought. From March, the US will ban Chinese-backed hardware and software that interacts with cars. That is potentially a problem for Pirelli, whose tyres are no longer mere rounds of rubber but tools for harvesting data, likely to get even smarter as cars go fully autonomous.