Supported by the Chinese government “Go Global” initiative, many Chinese companies is embarking on a cross-border acquisition strategy. They have the money to invest and the determination to buy – but as Europe is a diverse continent they are unsure where to look and how to carry a M&A process – and their business culture is different from Europeans, so the European companies may turn them a blind eye.
At the same time, stagnant local market conditions characterize Europe. Meanwhile, niche European technology companies often have insufficient financial capability and inadequate know-how and scale to Win in China. Some of these companies will benefit from shared ownership (minority or majority) of their company with a Chinese strategic investor. The upside is often a many-fold increase in turnover and profits, and an expansion of the production base in the home country as well as in China.
Many potential deals fail because of insufficient match-making activity, communication, preparation, and creativity. At SCEA, we are a catalyst for companies to make a smooth and effective win-win process.
What we do
Service platform to European clients:
- Identify investors which could become a significant Chinese equity and commercial partner
- Advise on deal structuring, and lessons learned from deals with Chinese investors
- Conduct valuations and negotiations
- Provide input to the joint business plan optimizing synergies and adding competitive China factors
- Drive and coordinate deal process, incl. handling sensitivities concerning business culture
- Attract a European or Chinese team of specialists (like co-investor, lawyer, etc.)
Service platform to Chinese clients:
- Identify suitable European target companies to acquire, and obtain Seller’s preliminary interest to cooperate
- Mitigate potential risks of misunderstandings between the buyer and the seller by bridging communication and culture differences.
- Close any information gaps between the parties to speed up the process.
- Negotiate on behalf of the Chinese buyer, including valuation
- Structure the cooperation between the buyer and the seller for sustainable win-win success.
- Attract a specialists’ advisors for due diligence.
- Obtain local and national government support of the investment.
- Obtain positive media coverage to build public image.
- Obtain debt financing from local banks or co-investment from local private equity funds in order to reduce risks.