China 'has UK firms in its takeover sights'

British companies should brace themselves for a wave of Chinese takeovers.

Allan Gasson, head of mergers and acquisitions at accountants and business adviser Deloitte, says many UK businesses are sitting ducks to a Chinese raid because of the collapse in the value of the pound.

"Many Chinese companies are looking towards the UK to expand into Europe," Gasson said. "This is as a consequence of the low value of the pound and depressed values, which have created an opportunity for Chinese businesses to enter Europe through acquisition.

"As a result we are expecting that over the coming months there will be an increase in M&A activity by Chinese companies in the UK. "

Speaking to a delegation of Chinese business leaders in London, Gasson added: "There is already evidence of increased activity. In 2008, 23 deals were done in Europe by Chinese companies, compared with only 13 in 2007, while the number of Chinese deals in the US fell by over a third over the same period."