Latest Research > M&A Activity Gaining Ground in 2010, Says Panel Hosted by AmCham Shanghai
Published on AMCHAM Shanghai, April 14, 2010 http://www.amcham-shanghai.org
Merger and acquisition (M&A) activity in China has rebounded from 2008 and 2009 levels, according to a panel hosted by AmCham Shanghai’s Financial Services Committee at the Regal International East Asia Hotel on April 7. The panel spoke about personal experiences and lessons from a number of notable recent deals.
Mr. Weichou Su, managing director of the Hina Group, shared his experiences working on the recent US$733 million merger between AsiaInfo and Linkage. It is a challenge to complete a merger between two familiar and equal business counterparts, said Weichou, but that the following recommendations may help manage such a process:
• respecting local know-how;
• forming a trusted relationship among company decision-makers;
• and creating a sense of urgency to complete the deal.
Krzysztof Werkun, a partner at China Renaissance Partners, described the drivers and environment that resulted in the recent US$307 million acquisition of U.S.-based Interstate Hotels by Thayer/Jin Jiang. The following key factors helped complete this Sino-foreign joint venture deal:
• embracing intangibles, such as a “China story,” that add value, providing important leverage beyond financials;
• appreciating overseas management expertise and positive chemistry between chairman;
• taking advantage of declining financials and a drop in the market to pressure parties to finish the deal urgency and to stay disciplined;
• and gaining regulators’ support for the transaction early on provides comfort to move forward.
Finally, Patrick Zhong, managing director of the Fosun Group, shared his company’s M&A investment strategy. Fosun, which is China’s largest privately-owned conglomerate, depends on finding and creating value in a project. Specifically, Fosun looks for opportunities in fragmented markets and pays attention to cash flow and the reputation of companies. Moving forward, Fosun is looking for global investment opportunities that tie in with the long haul of the Chinese investment environment. It is critical to communicate clearly to regulators why a particular transaction will benefit China.