Chinese Billionaire Who Modeled Himself On Warren Buffett Is Back To Chasing Mega Deals Overseas
A government crackdown on “irrational” overseas acquisitions forced China’s most aggressive dealmakers to shed some of their trophy assets in recent years, but Guo Guangchang looks set to reverse that trend.
The 52-year-old billionaire is often called the "Warren Buffett of China" for following the legendary American investor’s approach of using the cash flow from insurance operations to acquire other businesses. His Fosun conglomerate recently confirmed that it was in talks to acquire Thomas Cook’s tour operating business. Fosun is also reportedly considering a $1 billion takeover of Russian miner GV Gold and a joint bid for Bayer AG’s animal-health division, which could be worth up to $9 billion.
While the talks are certainly no guarantee of a deal, they're a clear signal that Fosun is ready to ramp up the size of its outbound deals at a time that Beijing is still reining in such investments and telling its peers to sell previously acquired assets. Analysts say most deals the group are currently pursuing have some synergies with its diverse business lines, but if it strays too far and appears to be opportunistic, the execution risk will certainly rise.
“They are under the watch of the government,” says Warut Promboon, managing partner of Hong Kong-based credit research firm Bondcritic. “ But as long as it [Fosun’s investment] is reasonable, it is still okay.”