According to information of Süddeutsche Zeitung (SZ), the Chinese conglomerate HNA indicated interest in getting on board Germany’s biggest insurance company Allianz SE, adding another headline after taking a major stake in the Deutsche Bank.
HNA Group Co. is a conglomerate headquartered on the Southern Chinese peninsula Hainan. Originally operating in the aviation industry, the group has undergone great diversification in the 2000’s getting significantly involved in industries as tourism, logistics, real estate and financial services. Today the group ranks 170th in 2017 Fortune Global 500, being counted as the most aggressive foreign investor in China.
The news of HNA Group’s interest in an involvement in the Allianz SE follows a pattern. Within the last few years, HNA’s investment vehicle focused on acquisitions outside Asia, mainly in the United States and Europe. Last year, the group acquired the American Carlson company and purchased a 25 percent stake in Hilton as well as a 30 percent in the Spanish hotel chain NH. According to senior chairman Chen Feng, HNA will be among the ten largest corporations on the planet until 2025 (SZ).
This also requires equity holdings in Europe’s biggest economy Germany, which Feng is targeting heavily during the last months. The first involvement was the purchase of Frankfurt Hahn airport close to Germany’s biggest airport in Frankfurt. After that, HNA announced to raise it share at Germany’s biggest bank to 9.9 percent, making the group the largest shareholder. An involvement in Allianz would mean another structurally important German company in the portfolio of the group.
The rationale behind the massive engagement is presumably of strategical rather than financial nature. Even though the times when China was blessed with two digit-growth rates seem to be far away, there are undoubtedly better ways to multiply your money than in the limping economy of the European Union. Yet, it is still money that brings HNA to Germany. In order to understand that, the case of the airport Frankfurt Hahn needs to be highlighted. Though opposing protectionism on the international stage, the government of Xi Jinping takes action to limit foreign investment of its companies. After the drastic Yuan depreciation in 2016 Jinping took capital control measures limiting the foreign engagement of companies such as HNA. In this light, having significant influence on a bank within countries of strategic importance will give HNA an edge given that Jinping continues his restrictive policy. Paired with owning an own airport and being involved in other major companies HNA will see itself with a valuable competitive advantage in its future operation in Germany and, by implication, Europe too.
However, also Germany, another proclaimer of free trade and self-appointed protectionism opponent, just enacted a law that allows the government to veto foreign takeover bids as an answer to the Chinese takeover of the German robotics maker Kuka. Rumors about Chinese interest in other German companies, such as HNA in Allianz and HSH Nordbank, contribute to the concerns of German politicians and industry executives of losing control of major companies that are to ensure the country’s future economic success. From that point of view, German officials will feel reassured that Allianz’ management rejected HNA’s request to acquire a major stake in the insurance company after consulting the Chinese wealth fund which holds a three percent stake in Allianz itself.
Nevertheless the legitimate question may be asked, whether the two countries that are said to be the principal supporters of free trade and globalization deserve their titles.
managermagazin, faz, wikipedia