Merger & Aquisistion
While foreign companies in China have long been buyers of Chinese companies, Chinese companies in Germany are increasingly becoming active as buyers themselves in recent years.
The motives of acquisition are usually different. Foreign investors usually acquire in China an existing production facility with a favorable cost structure, to be able to use the established sales network of the Chinese target and - increasingly frequently - to obtain know-how for high demanding but less expensive Chinese products, which meet their customer’s needs.
By contrary, Chinese buyers are looking at German companies for advanced technology, profound management skills, production processes and quality assurance, as well as the competence to develop world-class products and internationally recognized brands and a sales network with western customers with which the export of the products by the Chinese parent company will be increased.
The strategy pursued by Chinese buyers of earlier acquisitions to dismantle German plants after the purchase and to relocate them completely to China, has been widely acknowledged to be the wrong move. Experience has shown Chinese buyers that know-how is not easy to transfer; that such a strategy quickly destroys the value of the acquired brands and distribution channels, and also that the opportunity will be lost to use the development and management potential of the German company in the long term.
As a result, it has become much more popular to keep foreign companies intact and even expand them for further development in Western markets while leveraging the acquired expertise to expand and improve production in China for the Chinese and other emerging markets.
Our consulting services in the area of investor and acquisition include:
- In cooperation with our specialized partners the identification of suitable investors and acquisition objects
- Financial advice, also in cooperation with our specialized partners
- Guiding the buyer or seller through the entire process
- The development and implementation of strategies for restructuring and post-merger integration, taking into account cross culture challenges.