The price multiple paid by Chinese, Japanese and Indian buyers for European businesses has increased from 3.3 times EBITDA in 2010 to 9.9 times EBITDA in 2012. This is particularly significant as global multiples have fallen over this period.
The Chinese have the greatest appetite for Western assets with M&A activity by Chinese companies higher than last year. Interestingly it is not just the state owned companies leading the M&A charge but also, listed groups, privately owned and entrepreneurial ventures investing in a wide range of industries.
According to a recent study conducted by American Appraisal Asian buyers helped drive European deal values to the highest levels since 2007. Chinese buyers paid 11 times EBITDA in 2012 compared to 5.5 times EBITDA in 2011.
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