China's giant 'Unicorn' Fosun races for more deals

A string of overseas investments has shone a new spotlight on Chinese conglomerate Fosun, after the mysterious disappearance -- and re-emergence -- of its tycoon chairman rattled investors.
In the space of three days last week, the Shanghai-based company bought a stake in an Indian drugmaker for USD 1.26 billion, acquired a Brazilian investment firm and announced plans to take a stake in Portugal's biggest private bank.
That came only a week after it bought English Championship football club Wolves, and two months after it was part of a consortium that signed a memorandum of understanding to buy Athens' former main airport. Last year, it won a long-running battle to take over French holiday resorts group Club Med.

Founded 24 years ago by a group of classmates from China's prestigious Fudan University, Fosun has announced more than USD 15 billion in overseas acquisitions since 2010, according to Bloomberg News.
Started with capital of just 38,000 yuan (now USD 5,760), the company was an early investor in China's pharmaceutical and steel industries, before branching out into numerous business sectors including insurance and financial services.
The Chinese government has for years encouraged companies to invest abroad to secure natural resources, open new markets and gain access to foreign technology, but the weak global economy has presented new, attractive targets.

Chinese firms' overseas merger and acquisition deals more than doubled by value year-on-year in the second quarter, according to law firm Baker & McKenzie, surging 132 per cent to over USD 40 billion.

"Lower valuations of overseas companies dragged down by the slowing economy have made them more attractive to Fosun in terms of price," Sam Chi Yung, strategist at Delta Asia Securities in Hong Kong, told AFP.
"Fosun has taken advantage of the circumstances to buy more overseas."
In a two-track approach, Fosun chairman Guo Guangchang has urged proceeding slowly on future development to refine the USD 60 billion company's existing products and services, but moving fast to seize opportunities.
"When we have a very good product, we will allocate all resources to it, so that it quickly develops into a 'Unicorn'. Fosun eventually will become a giant 'Unicorn' with enormous power," Guo said in the firm's annual report in March.

The term unicorn typically describes technology startups valued at over USD 1 billion.