Cash-rich Chinese companies are eyeing strong brands as a key goal when making merger and acquisition deals in Europe despite their concerns about reputation risk, a survey by international law firm Clifford Chance has said.

The survey, released on Tuesday, was conducted among senior executives from almost 400 large companies globally in different industries, of which 122 come from the Asia-Pacific region. Over half of the companies in the survey have annual revenues of more than $1 billion each.

Asia-Pacific companies generally have strong financial capabilities and 87.1 percent of Chinese respondents prefer to use cash reserves to finance M&A deals, the poll found.

Acquiring strong brands is important for 26.2 percent of Asia-Pacific respondents and is a strategy for many Chinese companies looking to grow their businesses.

"Chinese respondents risk much of their reputations if the M&A deals they are involved in fail," said Tim Wang, a partner at Clifford Chance's Beijing office.

Currency risks are seen as the greatest threat to executing M&A deals in Europe by 41.8 percent of Asia-Pacific respondents, followed by rising costs, including labor and taxes (35.2 percent) and reputation risks (30.3 percent).

Although the financial crisis in the eurozone and unresolved instability continues to dampen appetite for M&A transactions in Europe and around the world, only 9 percent of Asia-Pacific respondents do not consider Europe an attractive place for M&A activity.

In 2012, the United Kingdom was the number one target jurisdiction for Asian companies, as it has seen less impact from the eurozone crisis and is considered a more open foreign investment environment. The UK was followed by Germany and France.

Gaining technology access and know-how is a key driver for acquisitions in Europe, as stated by 43.4 percent of Asia-Pacific respondents, particularly in countries such as Germany where deals made included China's Sany Heavy Industry Co Ltd's acquisition of Putzmeister GmbH, a major manufacturer of concrete pumps.

Meanwhile, the risks associated with the European market are opening up opportunities for bold investors to acquire assets at attractive valuations.

The survey said that 72 percent of Asia-Pacific respondents consider that assets in Europe are either undervalued or that their valuations are about right, while 71.3 percent expect valuations to either stay the same or decrease over the next two years.

"This means we should continue to see opportunistic acquisitions by Asian investors into the distressed European market over the next few years," said Terence Foo, a partner at Clifford Chance's Beijing office.

For instance, Chinese private conglomerate Fosun Group and AXA Private Equity plan to buy holiday group Club Med along with the company's management, the companies said in May.

However, Matthew Layton, head of global corporate law at Clifford Chance, said that Chinese companies may face strong competitors when bidding for good assets in Europe.

Layton said that it's important to maintain a good long-term relationship with European companies and make solid commitments on matters such as employment.