Merger & Acquisition

Common Issues

The following issues are commonly encountered by Multinational companies when doing a M&A transaction in China:

  • Lack of transparency in the entire market, difficult to get access to potential target's information
  • Culture difference exists. If not using the appropriate language, the deal may be killed from the very beginning
  • The target's financial information is not sufficient to work-out the financial model or business valuation
  • The accounting principle used by the target is much different from IAS/US GAAP
  • Target uses two set of books, one for management reporting, one for tax reporting
  • Need to take over a huge labor force from the target
  • The statutory valuation for state-owned companies may generates very different results from business valuation
  • Target is overall lack of awareness of environmental, health and safety issues
  • The transfer pricing between the target and its related parties is a mess
  • The regulatory requirement in certain restricted industries is complex

The list goes on.

Our Services

We provide a one stop shop for our clients to successfully conclude a deal in China.

Entry Strategy

  • Market studies
  • Industry competitive analysis
  • Benchmarking analysis
  • Regulatory environment analysis
  • Tax environment study
  • Location study
  • Supplier assessment

Target Identification

  • Background Check
  • High level financial/tax data review
  • Comparative analysis of potential targets
  • Key risk evaluation
  • Pre Due-diligence negotiation support
  • Formation of preliminary bid structure

Due Diligence

  • Financial Due Diligence
  • Tax Due Diligence
  • HR Due Diligence
  • Business valuation
  • Statutory valuation
  • Design deal structure
  • Design bidding structure
  • Negotiation support

Closing/Post Deal

  • Develop integration plan
  • Government approval facilitation
  • Tax incentive negotiation
  • Work-out the transfer pricing policy
  • Liquidation support
  • Assistance in implementation of integration plan
  • Project Management/Merger and Acquisition Framework ("MAF")



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