Steve Ganster Presentation to GIC Global Summit on Mergers and Acquisitions in China 2009 http://www.gicglobal.com/
Steve can be reached at sganster@tompkinsinc.com
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Mergers and Acquisitions in China 2009
1. Deal Cultivation – Key to Success in Making Acquisitions in China Steven H. Ganster, Managing Director Technomic Asia A Subsidiary of Tompkins International [email_address] www.technomicasia.com www.tompkinsinc.com Presented at the… 2009 & 6 th Annual Mergers & Acquisitions in China Summit
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3. The M&A Landscape China is in a “late adolescent” phase in terms of market maturity... Infant Toddler Young Teen Late Adolescent
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10. Strategy vs. Structure China’s tough market environment necessitates doing “strategy before structure” In the past… Structure (JV) China Strategy Force-fit the strategy to the structure Find the structure to fit the strategy Structure (any) China Strategy Today…
11. Foreign Investor Chinese Company LTD FIE (JV, WFOE) Non-China offshore company (NCOC) FIE (JV, WFOE) China border FIE (JV, WFOE) Buy shares or the whole NCOC to own the FIE in China* Convert the Chinese Company to an FIE in case of equity deals or concurrently set up an FIE to hold acquired assets The Foreign Investor owns or intends to set up an FIE first Direct acquisition Buy and run acquired assets The NCOC owns the FIE Strategy vs. Structure *It is also popular when establishing a JV, to set up the partnership outside of China which entity then wholly own the China WFOE FIE (JV, WFOE) Convert JV to WFOE in case of buying equity form Chinese owner(s) or concurrently set up an FIE to hold acquired assets
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13. The Acquisition Process… Transaction Structure & Execution Candidate Identification & Qualification Acquisition Strategy Legal, Financial & Commercial Due Diligence LOI Signed In China, acquisitions require more upfront target cultivation and pre-due diligence than is typically needed in the West. Cultivating the Deal – Doing the Work! Deal Cultivation & Pre Due Diligence Market Assessment & Business case These areas often short changed
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17. Introduction to Technomic Asia A Division of Tompkins Associates Summer 2009 For more information, contact: Steve Ganster Managing Director [email_address] Technomic Asia China Office Room 502, Jin Tai Building 58 Mao Ming Road (South), Shanghai 200020, China Tel: +86-21-6473-2588 Fax: +86-21-6390-6659 www.technomicasia.com www.tompkinsinc.com