Successful Mergers & Acquisitions in China

December 2015

Comments :

• Based on a 2 year research led by a teamof M&A professionals. An early version waspublished in French (2013, Séfi), then a newinternational edition was released in Englishwith World Scientific (2015)

• The book is supported by leading institutionsincluding Maverlinn, Mazars, Willis TowersWatson, KRS and RBSC*. They not onlyprovided support but also key insights for theresearch

• Aside explaining what is M&A in a Chinesecontext, the book focuses on identifying keyfactors for leading successful acquisitions

• The research initially set for an internationalaudience also received a warm welcome fromChinese practioners

Mergers & Acquisitions and partnerships in China is a newfinance book published in English by World Scientific

Comments :

• Based on a 2 year research led by a teamof M&A professionals. An early version waspublished in French (2013, Séfi), then a newinternational edition was released in Englishwith World Scientific (2015)

• The book is supported by leading institutionsincluding Maverlinn, Mazars, Willis TowersWatson, KRS and RBSC*. They not onlyprovided support but also key insights for theresearch

• Aside explaining what is M&A in a Chinesecontext, the book focuses on identifying keyfactors for leading successful acquisitions

• The research initially set for an internationalaudience also received a warm welcome fromChinese practioners

« To be successful in China over the long runrequires developping some widespread, solid and

deep roots in the Chinese business environment. »* for the French edition.

The author’s team is composed of an international college ofseasonned professionals and M&A experts

Forensic Legal Finance HR Accounting

Mergers & AcquisitionsFrank Zheng

Stéphane Luo

Olivier Coispeau

Josephine Chow

Thierry Labarre

The book provides a comprehensive and clear toolkit forleading successful acquisitions in China

Critical transaction topics are covered :• Preparing for external growth in China

• Defining the framework for the acquisition

• Managing acquisition risks

• Negotiating effectively

• Closing the transaction

• Seven cases of M&A and partnerships in China,including: Nestlé, CAT, ZAP, Coca-Cola, Nycomed,SEB and Airbus

Key steps for M&A in China Critical transaction topics are covered :• Preparing for external growth in China

• Defining the framework for the acquisition

• Managing acquisition risks

• Negotiating effectively

• Closing the transaction

• Seven cases of M&A and partnerships in China,including: Nestlé, CAT, ZAP, Coca-Cola, Nycomed,SEB and AirbusLeadership

« We highlighted two key success factors : (i) thenecessary quality of the relationship with the seller,

and its business ecosystem, and (ii) the need to havea long term perception of time. »

The book advocates for an integrated M&A approach with anemphasis on selection of best option for maximum impact

Emphasizes multicultural strategicfinance as a distinctive footprint,meaning the need to integrateM&A, culture and strategy

• Best final option not necessarily the best initial option after careful review and DDs

Points toward impact M&A and alsoadvise on preparation andintegration to optimize success

Emphasizes multicultural strategicfinance as a distinctive footprint,meaning the need to integrateM&A, culture and strategy

The secret for successful M&A in China is a good upstreamand downstream preparation

1. Upstream preparationM&A strategic group

2. M&A executionTrusted expert team

Expert M&A teamTrust & empowerment

for fast action

Clear external growthstrategy

1 Strategic M&A is a three step process

1. Upstream preparationM&A strategic group

2. M&A executionTrusted expert team

3. IntegrationTransition management

Expert M&A teamTrust & empowerment

for fast action

Early identificationof acquisition benefits

Smart transitionmanagement to leverage

acquisition

2

3

Deal story lineDeal background

“Nestlé" M&A Case : Nestlé (Swiss) – Hsu Fu Shi (China)

• In 2011, Hsu Fu Shi announced a possible jointventure with Nestlé in China

• MOFCOM approves the USD 1.7 billionacquistion of 60% of Hsu Fu Shi by Nestlé

• Nestlé can now rely on its new partner todevelop a stronger presence in the China retailmarket

• Hsu Fu Shi also contributes two productionfacilities in Guandong and Henan to developnew products with Nestlé for the local market

• Nestlé based in Vevey (Switzerland) is a worldleader in the food business with then a limitedmarket share in confectionary market in China

• Hsu Fu Shi is a hundred year brand, willing tofind the relevant partner to accelerate its growthon the confectionary market in China and beyond

The transaction was prepared in the very details and smoothly executed

• In 2011, Hsu Fu Shi announced a possible jointventure with Nestlé in China

• MOFCOM approves the USD 1.7 billionacquistion of 60% of Hsu Fu Shi by Nestlé

• Nestlé can now rely on its new partner todevelop a stronger presence in the China retailmarket

• Hsu Fu Shi also contributes two productionfacilities in Guandong and Henan to developnew products with Nestlé for the local market

• Nestlé based in Vevey (Switzerland) is a worldleader in the food business with then a limitedmarket share in confectionary market in China

• Hsu Fu Shi is a hundred year brand, willing tofind the relevant partner to accelerate its growthon the confectionary market in China and beyond

The book has been praised for its clarity and practicalcontribution to smoother M&A operations in China

« The research is exceptionnal in many aspects »Jean-François Di Meglio, President Asia Centre

« This is a major contribution »Pr. Seamus Grimes, Emeritus Professor, Whitaker Institute, NUI Galway

« A brand new framework and in-depth analysis »Dr. Wang Duanyong, Shanghai International Studies University

« This book provides essential answers »Pr. Yves Dolais, Emeritus Dean of Angers Law and Economics University

« The research is exceptionnal in many aspects »Jean-François Di Meglio, President Asia Centre

« This is a major contribution »Pr. Seamus Grimes, Emeritus Professor, Whitaker Institute, NUI Galway

« A brand new framework and in-depth analysis »Dr. Wang Duanyong, Shanghai International Studies University

« This book provides essential answers »Pr. Yves Dolais, Emeritus Dean of Angers Law and Economics University

Acquired by many university libraries inc. Harvard, HEC, Tufts,Shanghai, Columbia, Ngee Ann Poly, Temasek Polytechnic,Georgetown, Hong Kong, Québec, Duke, NUI, Concordia, California,Nevada, UT Sydney, Spalding, Marshall, Indiana, Butler, Bethel,Bremen, Vincennes, Austin, Nebraska, Memphis, Rogers,Washington ...

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