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China Looking Out to Acquire Overseas Tech Firms through GSR Ventures US$5 Billion Fund

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Published on : Jul 27, 2015

The Chinese dragon is looking out to acquire global technology. GSR Ventures, the Chinese venture capital firm is raising fund worth US$5 billion to buy assets overseas. According to people close to the matter, the fund will aim to acquire companies specializing in sectors such as biotechnology, internet, and technology. Even though the country is currently witnessing the slowest growth phase since last two decades, the growing Chinese market is the key to growth prospects for such companies. 

Established by Chinese tech entrepreneurs in 2004, GSR Ventures came into the limelight when it joined hands with the U.S.-based venture capital firm Oak Investment Partners during the buying of 80% stake of Philips NV’s automotive- lighting and lighting components operations in a deal worth US$2.8 billion. With the Chinese policy makers trying to decrease the dependence of domestic firms on foreign technology providers, GSR Ventures’ fundraising aims to reduce the number of technologies China imports. The country is the largest consumer for products such as cars and mobile phones and is dependent on foreign firms for semiconductors and advanced automotive technology. 

So far, in this acquiring spree, Chinese government owned Tsinghua Unigroup Ltd. has made a bid worth US$23 billion to purchase the U.S.-based chipmaker Micron Technology Inc. Tsinghua Unigroup is an arm of China’s top science university. However, the company is facing tough time in negotiating with Micron Technology as the deal would lead to potential scrutiny by the U.S. government. 

On the other hand, The U.S. and European companies are actively searching for Chinese partners to increase their sales in the region. As the Chinese government is discouraging purchase of foreign equipment and favouring local firms, the international firms are tying up with local companies and sharing their technology with them in an attempt to maintain their market share in the region. The latest has been the sale of 51% stake of Hewlett Packard’s networking-gear business in China to Tsinghua Unigroup. 

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