26 March 2020
Overseas-Ownership of German Companies Highlighted in New Survey
Defying widespread perception, US owns seven times as many German-registered companies as mainland China.
Despite widespread concerns that China has been picking off many of Europe’s leading businesses through a continual programme of acquisitions, a new survey indicates this may have been considerably over-stated. Indeed, according to an annual review of just which countries own the most German companies – as conducted by the Dusseldorf-headquartered DDW-Die Deutsche Wirtschaft research company – the US owns nearly seven times more of the country’s businesses than China.
With ownership of some 1,853 German-registered companies, the US has almost 1,000 more than second-placed France (889). China, for its part, is ranked 10th overall (with ownership of just 274 such companies), well behind many of the larger European countries, as well as seventh-placed Japan (474).
The findings are based on DDW’s analysis of some 8,300 of the largest overseas-owned companies registered in Germany. Such companies account for about EUR1.27 trillion in annual sales and provide up to 3.7 million jobs.
In terms of why overseas investors are keen to acquire / start German businesses, the survey indicates that immediate financial returns are not always the primary consideration. Above all, it appears, any such decision is largely taken with several strategic considerations in mind.
Most obviously, owning a German company offers instant and unlimited access to the 83-million-strong German consumer market. Adding to its allure is the highly brand-loyal nature of the market, with its strong preference for well-known products and services, particularly those with a domestic origin. On top of that, any such acquisition also has the appeal of a potentially high level of technological transfer. With German innovation almost universally prized, it is no surprise that 10% of the country’s most successful high-tech businesses are actually majority overseas-owned.
In terms of the preponderance of US-ownership, the survey also notes that the reverse is true, with German investors owning more companies in the US than anywhere else. Again, market access and technology transfers are considered to be the key purchase criteria.
Outside of the top 10 nations owning German companies, a number of interesting placings can be found a little further down the list. In 16th place, for instance, is India with 93 companies (including Novelis Deutschland). At 27, meanwhile is Taiwan, with the territory holding title to 34 German businesses (including ACER Computer). A little further down still – and nestling in between Mexico and Ireland – is Hong Kong at number 40, with seven companies (including Ista, a Dusseldorf-headquartered energy-management company).
June Weng, Frankfurt Office