Chinese appetite for prize European assets remains strong

Shanghai-Skyline

Date

Chinese appetite for prize European assets remains strong and healthy as can be seen in the recent £900m acquisition of Pizza Express by Beijing-based Hony Capital.

The UK-based restaurant chain, which has 436 restaurants in the UK and 68 international restaurants, sees Asia as a key part of its growth strategy. New owners Hony Capital plan to expand the brand both in the UK and in China which at present is home to 22 Pizza Express restaurants. This new Chinese ownership will leverage its local expertise enabling accelerated growth of the brand in China.

This latest acquisition yet again demonstrates the strength of European brands in the Chinese domestic market and follows the 2012 acquisition of a controlling stake in Weetabix by China’s Bright Food. According to Thomson Reuters, outbound mergers and acquisitions in the food and beverages industries accounted for 17% of total Chinese M&A in the first half of this year, an increasing trend predominantly led by a growing consumer class.

Hony Capital is a China-focused middle-market private equity firm. The acquisition of Pizza Express provided an exit for private equity firm Cinven. Last year Cinven explored a sale of Gondola Group, the parent company of Pizza Express and other restaurant brands including Zizzi and ASK. Cinven ultimately decided to dispose of the restaurant groups individually, beginning with the sale of the Byron burger chain to Hutton Collins Partners in October 2013.