China Investment Corp, China’s Sovereign Wealth Fund buys big, really big!

Today sees the formal announcement that China Investment Corporation (CIC) is to acquire Logicor, the pan-European logistics company, from Blackstone, the US private equity firm, for the tidy sum of USD 13.4bn.

CIC was not the only Sovereign Wealth Fund to be linked with the exit of Blackstone from Logicor. South East Asian neighbour and Singapore’s Sovereign Wealth Fund, Temasek Holdings, was also named as a potential buyer. This will be CIC’s largest controlling stake acquisition in its 10-year investment history by some way, its previous being a little over a year ago when it acquired Australia’s Burra Foods for USD 233m. That said, CIC is willing to spend big when the target is the right one, having paid USD 2.6bn for a 2 per cent stake in Total SA in 2012, and having invested just over USD 2bn in Alibaba for an undisclosed minority stake, also in 2012.

With over USD 810 billion in assets it’s not surprising that CIC is prepared to pay top drawer prices for companies that it identifies as being a good strategic fit for its investment portfolio. This is further proof that Chinese buyers have deep pockets, with the deal being the fourth-highest value outbound M&A deal recorded between China and a European company to date, further reinforcing China’s appetite for cross border deals.