BLAND, brown and to the uninitiated, rather tasteless, Weetabix may seem a strange object on which to lavish billions of renminbi.

A mainstay of the British breakfast table for eight decades, the unsweetened wheat cereal is virtually unknown in China. In Carrefour in Shanghai, a box sells for 43 yuan (US$6.8) - nearly three times as much as in London and 10 times more than a packet of the more traditional staple congee.

Yet the humble cereal took on a more interesting flavor last week when Bright Food, China's second-largest food company, bought a controlling 60 percent stake in Weetabix Group from British private equity firm Lion Capital in a deal that values Weetabix at 1.2 billion pounds (US$1.9 billion).

For Chinese companies looking to buy their way West, the Weetabix acquisition has all the hallmarks of a good foreign deal. A successful European brand, it has grown faster than the market in the past eight years. It also adds several big names - Weetabix Group also owns Alpen and Ready Brek - to Bright Food's already impressive stable of brands.

Route into China

The deal also offers the Weetabix brands a route into China's soaring market for packaged convenience foods, where a middle-class troubled by food safety scares and with growing disposable income is receptive to trusted Western brands.

China's confidence in foreign mergers and acquisitions is undoubtedly growing. The nation was behind 28 percent of all overseas deals last year, up from 17 percent the year before, according to A Capital, an investment fund.

Beijing has enthusiastically promoted outbound investment since launching its Going Global strategy in 2001 and says buying top foreign brands is a shortcut to international success. Some US$68.8 billion was invested overseas in 2010, according to the Ministry of Commerce - a 21.7 percent rise from a year before.

High-profile recent deals include the sale of Ferretti, the Italian yacht maker, to Shandong Heavy Industries, and Zhejiang Geely's US$2.2 billion purchase of Volvo, the Swedish car manufacturer. The timing couldn't be better. A sovereign debt crisis and slowing economy has left Europe desperately short of money, while Chinese investors are cash-rich. It's an equation that yields bargains aplenty for the Chinese.

Yet for all this, China still punches below its weight on mergers and acquisitions. China's outbound investments to date have been characterized as much by failure as by success. Some 13 percent of deals which get to the offer stage fail, according to the Economist Intelligence Unit.

Bright Food's track record in the international arena has been equally fitful. Although it failed to attempts to buy Britain's United Biscuits in 2010 and US vitamin chain GNC in 2011, it did manage to acquire majority stakes in Australia's Manassen Foods and New Zealand's Synlait Milk in the past two years.

And then there are the high-profile flops, such as Sichuan Tengzhong's bid for Hummer cars in 2010 and Cnooc's bid for BP's stake in Argentina's Pan American Energy in 2008. Many plans by smaller companies never get to the offer stage. After rising for several years, the number of deals carried out by Chinese companies dipped in 2010 and 2011.

Ten million consumers enter the Chinese market each year, shopping for everything from luxury goods to bathroom fixtures. Beijing wants to elevate the country's manufacturing base to producing higher value goods instead of cheap clothes and toys. To do this, it needs what Western companies can provide: technical know-how, skilled workers, research labs and brands. Buying overseas assets is a way to enhance international competitiveness and gain instant access to assets that would take decades to develop alone.

Broader gap

Why do so many Chinese find the going tough overseas? Many companies complain that they can't get access to information they need in making acquisition decisions. Other deals fail because the companies cannot agree on a price. Some people talk about a broader gap in knowledge.

"Chinese firms lack in-depth and comprehensive knowledge about overseas markets, practices and rules, and they are not adept at conducting public diplomacy with the local communities," said Zhao Qizheng of the National Committee of the Chinese People's Consultative Conference in March.

State-owned enterprises, in particular, move at a slower pace than the agile West, with its armies of corporate lawyers and bankers poised to work around the clock to seal a deal. Chinese companies take weeks rather than days to carry out due diligence and risk assessment, and that delay means they often lose out.

Yet darker factors may also be at play. Some Chinese firms cite prejudicial treatment at the hands of foreign regulators, complaining they are locked out. It is not an unfounded claim. In March, Australia blocked telecoms company Huawei from bidding on broadband contracts, citing national security concerns - a move that even competitor Vodafone said was unfair. Huawei has yet to dispel some foreign suspicions that it still maintains ties to the Chinese military.

Degree of caution

"The main issue is that no one in Europe knows who these new investors are, so there is a degree of caution," said Andre Loesekrug-Pietri, founder of A Capital. "They know CIC, PetroChina, Shanghai Automotive, but beyond that, very little: how these firms decide, what is their international organization, their strategy, their ownership structure."

Fears about patent hoarding or asset stripping linger in Western minds. Most strikingly, the perception that all Chinese companies are linked to the government leads countries to fear that deals are not purely corporate but are somehow political in nature.

Nationalism over assets is not a peculiarly anti-Chinese phenomenon. One only has to look at the reaction the Kraft purchase of Cadbury provoked in Britain in 2010. But Chinese companies could do a lot more to articulate their intentions. They can do better at communicating who they are. To do this, they need to invest in public relations and branding. Currently they lag behind their US or European counterparts.

Europe needs to be more receptive to the benefits of foreign investment. A dose of renminbi will be hugely beneficial for the debt-stricken continent. As a rule, Chinese companies want to use acquisitions to invest in new markets, creating jobs as they expand. Europeans need to realize they can keep on eating Weetabix, even if they no longer own it.