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")
