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Growing tension and the unresolved China-US trade war has led to a sluggish start for Chinese M&A activity in 2019. Nevertheless, these uncertainties have created new drivers for M&As, with resilient investors seeking new markets for growth and refocusing on domestic opportunities that have been buoyed by corporate restructuring and industry transformation under the new economic growth model. Our panel of senior dealmakers delve into the current landscape and offer insights for the future.
Led by the US and Europe, governments have tightened their scrutiny of foreign investors, sighting potential national security risks as a key concern. New regulations and screening processes are much more rigorous and time consuming for acquirers. As such, it is important for companies to understand the ramifications of these changes and prepare for continually evolving regulatory challenges. Our professionals discuss:
Pushed by domestic slowdown, government pressure to deleverage, and SOE reform, Chinese corporates have begun divesting their non-core assets. Meanwhile, as unresolved trade tensions add to rising operational costs and fierce local competition, MNCs are in partial or full exit mode. The result? Plentiful quality assets at attractive valuations. However, accurate evaluation and swift completion is never easy. Our panellists discuss the opportunities.
Chinese companies are becoming more ambitious in their expansion across Asia; from OBOR synergies in Central Asia to consumer-related opportunities in Southeast Asia and access to quality products and technologies in North Asia. However, entering these markets, especially in emerging economies, requires good local partners and thorough risk assessment. Our experts showcase the attractive prospects and sectors that best fit Chinese strategic investors, as well as explain how to successfully penetrate these markets.
As deal complexity increases due to unstable political developments, tightened regulatory reviews, and deepened cross-cultural misunderstanding, corporates are finding value working alongside private equity in M&A. Despite the differences in expectations, nimble private equity investors are able to successfully navigate the obstacles and achieve the desired outcomes of their acquisitions. Our panel of seasoned fund managers and corporate decision makers discuss how this relationship has evolved.
Despite talk of a growth slowdown, China’s consumer market remains a hot prospect—driven by a burgeoning middleclass from lower-tier cities, consumers’ behavioural changes, and an increasing awareness about health and wellness. With domestic companies wanting to capitalise in this market, foreign entrants are looking to offer new products and technologies. Our panel of international and local experts highlight the strategies that can best access China consumer opportunities.
In recent years, it has become harder for Chinese companies to acquire Western technologies in order to advance their tech competency. In response, the Chinese government, as well as the private sector, has been nurturing homegrown innovation by offering tax incentives to hi-tech industries, supporting the development of startups, and launching initiatives such as the Shanghai Technology Innovation Board. It is hoped that this will create even stronger world-class companies and help China build its own tech capabilities. How will this reshape the M&A landscape? Our tech-savvy investors predict what might happen next.