Currys attracts Chinese giant's takeover interest

Mike Ashley's Frasers Group owns a stake in Currys. Photo: Kirsty O'Connor/PA

JD.com's financial and logistics firepower could become the next big player in British retail.

It is the largest retailer in China. It was the world's seventh largest and the fastest growing of the world's 10 largest companies, according to a Deloitte report last year.

It has an active customer base of 580 million people, and its logistics division has one of the largest infrastructure networks in the world with more than 1,600 warehouses.

However, a Chinese takeover could prove controversial. Eight of the 17 acquisitions blocked by the UK's Investment Security Unit (ISU), which investigates foreign takeovers it deems risky, were linked to China.

In December, Economic Security Minister Nusrat Ghani told the Business and Trade Committee: «This is a country that we need to assess when it faces ISU, knowing that it poses a national threat to the UK's economic security.»

JD .com is looking abroad as it faces a prolonged slowdown at home. China is currently suffering from deflation, and the real estate sector, which once accounted for a fifth of China's gross domestic product (GDP), has been in chaos since 2021.

This is weighing heavily on household finances as consumer confidence is in decline. China's stock market hit a five-year low in early February.

The UK has proven to be a hotspot for foreign bidders in recent years. The general malaise in the London stock market has resulted in companies receiving low valuations, making them attractive targets for bidding.

There were 35 bids for UK companies worth more than £100 million in 2023, according to Peel Hunt sterling. Companies worth a total of £17bn exited the market last year. High-profile takeovers include Mars' £534 million acquisition of Hotel Chocolat.

However, the string of takeovers has sparked criticism that investors are chronically undervaluing British businesses. Those making this argument point to the 170% premium paid by Mars in the Hotel Chocolat deal as evidence of market dysfunction.

Carris declined to comment.

With J.D. .com contacted. for comments.