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China Versus The World: Why Companies Are Picking Chinese Private Equity Firms Over Their Global Peers

China Versus The World: Why Companies Are Picking Chinese Private Equity Firms Over Their Global Peers - Lexmark International, Inc. NYSE:LXK, NXP Semiconductors N.V. NASDAQ:NXPI

China's private equity scene is exploding across the world, and it makes sense. Despite recent economic woes, China's economy is still expanding, although at a slower rate than in the past.

China's desire to gain exposure to assets across the world has resulted in Chinese private equity firms taking part in at least $16.4 billion worth of global transactions, according to a report by Bloomberg.

One example of the power of China's private equity influence is Gimatic Srl, a maker of industrial automation components that calls the Italian Alps its home. The company turned down bids from various European and U.S. private equity firms and ultimately sold a majority stake of its business to AGIC Capital, a China-based private equity firm that is backed by the country's sovereign wealth fund.

Related Link: Chinese Investments Abroad Surge More Than 58% In 2016; Country Becomes Net Funds Exporter

While Gimatic's name is relatively unknown, if not completely unfamiliar, among most investors, names such as Lexmark International Inc LXK 0.45%, NXP Semiconductors NV NXPI 1.33%, and web-browser maker Opera likely are.

Chinese private equity firms played a role in the $3.6 billion takeover of Lexmark, the $2.75 billion purchase of NXP and the $600 million acquisition of Opera.

"These Chinese funds are already beginning to alter the calculus for buyout deals worldwide," Peter Fuhrman, the chairman and CEO of China First Capital, a Shenzhen-based investment banking and advisory firm told Bloomberg. "It's about buying companies that, once they have Chinese owners, can start making really big money selling products in China."

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