Brasilian Investment in Portugal Shoots Up Reaching 3,552 Million Euros (January to July 2014)
For the first time ever, Brasil surpassed Spain (2,771 million euros) to become the biggest investor in Portugal. The Oi / PT merger was partially responsible for a substantial share of the registered capital influx.
However, investments from companies like Camargo Corrêa (owners of Cimpor – a cement company), Embraer and the VISA Gold program (residence visas for buyers of real estate in excess of €500 million) also contributed to the registered growth in Brazilian investment.
Overall, gross FDI into Portugal grew 78% in May (went from € 7,979 million to € 14,211 million). Of the € 6,232 million that arrived in May, 3,457 originated in Brazil.
In line with the recent trend, Angola’s investment in Portugal has tripled this year to 123 million euros.
Until the end of July, gross FDI in Portugal reached €17,777 million, 15.4% more than during the same period in 2013.
Over the past three years, Chinese companies have invested 5.65 billion in mergers and acquisitions of Portuguese companies, or about 40 percent of the total.
The bulk of Chinese investment went to the power sector, with an investment of 3.43 billion euros to buy a stake in electricity company Energias de Portugal (EDP), national grid company Redes Energéticas Nacionais (REN) and acquisition of the assets of EDP Renováveis.
After EDP, the acquisition of insurer Fidelidade by Fosun International was the second largest deal involving FDI in the range of 1.635 billion euros.
Earlier this month, Fosun International invested over 478.5 million euros via Fidelidade to buy Espirito Santo Saude (ES Saude).
In the wave of mergers and acquisitions that Portugal has experienced since the 2011 financial crisis and subsequent economic bailout, many Angolan companies have taken the opportunity to strengthen their investments, particularly in banking and telecommunications.
According to a recent study by business school AESE – Escola de Direcção e Negócios “recent Chinese investments in major companies, such as EDP and REN, along with strong support from Chinese financial entities, the purchase of the insurance business of Caixa Geral de Deposits by Fosun and installation of the Bank of China, the Industrial and Commercial Bank of China and Huawei in the country, show that China is increasingly becoming a significant partner as a foreign investor in Portugal.”
The study, entitled “Internationalization and Foreign Investment as Engines of Growth,” also said that Portugal’s competitiveness “increased dramatically” with the “positive perceptions of businesspeople and senior managers” .
The work carried out by AESE also says, “the amount and nature of foreign investment have contributed to improving the national situation in terms of innovation, particularly by enriching the technological content and the level of knowledge incorporated into products, thus promoting increased exports.”
Sources: Luís Villalobos and Ana Brito, Público & MacauHub