Europe debt crisis offers bargains for Asian firms: Macquarie
SINGAPORE (Reuters) - The European debt crisis is presenting bargains for cash-rich Asian firms such as Hong Kong-listed conglomerate Hutchison Whampoa Ltd (0013.HK) and Malaysian gaming company Genting Bhd (GENT.KL), Macquarie Securities said.
Currency weakness and share price declines in Europe are drawing Asian investors seeking to acquire brands with global reach and gain access to higher-value technologies.
"As the prospect of a Greek exit overhangs the (European) Union, increased pressure on asset-owners is likely going to lead to fire-sales," Macquarie analysts Emil Wolter and Aniel Mahtani wrote in a report.
Macquarie identified 53 European companies as potential asset sellers, the bulk of which are from Italy. Among them include Finmeccanica (SIFI.MI) and Enel (ENEI.MI).
Distressed assets in the infrastructure, industrial, and technology, media and telecommunications sectors are most likely to attract Asian companies, Macquarie said.
Hutchison, controlled by Asia's richest man Li Ka-shing, has offered to buy struggling Irish telecoms firms Eircom for 2 billion euros ($2.47 billion).
In February, Hutchison bought Orange Austria from France's Telecom FTE.PA and a private equity fund in a deal valued at $1.3 billion euros including debt.
Hutchison held HK$66.5 billion ($8.57 billion) in cash and equivalents as of the end of last year, while Genting had 13.2 billion ringgit ($4.16 billion), earnings statements show.
Based on strong cash flows and low cost of debt, Macquarie also identified Dongfeng Motor Group Co. Ltd, Grasim Industries Ltd (GRAS.NS), HTC Corp (2330.TW) and Singapore Technologies Engineering Ltd (STEG.SI) as potential bidders of assets in countries such as Spain, Italy, Greece, Ireland and Portugal.
Last month, China's YGM Trading Ltd (0375.HK) bought the United Kingdom's Aquascutum, the failed luxury clothes maker that has dressed royalty and politicians.
The deal came barely a week after Chinese state-owned Bright Food agreed on May 3 to buy a controlling stake in privately held Weetabix, the 80-year-old breakfast cereal maker that coined the slogan "Have you had your Weetabix?"
Other recent high-profile Chinese acquisitions include machinery maker Shandong Heavy Industry Group's deal to take over debt-laden Italian luxury yacht maker Ferretti. ($1 = 0.8088 euros) ($1 = 7.7609 Hong Kong dollars) ($1 = 3.1717 Malaysian ringgit)
(Editing by Ryan Woo)
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