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21st December 2016

Trends and Services

Current trends

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.