Korean tech firms become target of China's increasing M&A activitiesUpdated: 2014-07-28 22:02:23 (KST)
Chinese companies are busy buying up overseas companies with their huge cash reserves.
According to Bloomberg Monday, Chinese firms spent some 44 billion U.S. dollars on global merger and acquisition deals this year -- up nearly 40-percent from a year earlier.
Chinese investors have traditionally invested in the domestic real estate market, but with profits eroding amid slowing growth, many are turning to foreign firms for higher gains.
Korea, a close neighbor and home to many advanced IT technologies, is one of the major go-to places for China's investors.
Chinese corporate mergers and acquisitions of Korean firms have jumped 27-fold to 661 million dollars this year compared to the same period last year.
So what's behind the spike?
Well, it's mainly because Asia's biggest internet company, China's Tencent spent some 500 million dollars buying a 28-percent share in Korea's CJ Games as it looks to bolster its lineup of online and mobile entertainment.
China's IT giants like Tencent, along with Alibaba and Baidu -- are fiercely investing in Korean game developers to acquire the skills to invent 'hit' mobile games.
On the other hand, Korean firms' investment in Chinese firms through M&A's stands at a mere 20-million dollars this year one-fifth of the volume recorded last year.
This is raising concerns Korean firms may lose their own shares while the Chinese aggressively acquire Korean stakes.
Song Ji-sun, Arirang News.
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