China’s M&A Market, Like a Ride on Disney’s Space Mountain

Download this podcast Download audio file (20090621_manda.mp3) I’m speaking this week at the Sixth Annual GIC Mergers and Acquisition Summit, the title of my presentation is Deal Cultivation – Keys to Success in Making Acquisitions in China. The MA process in China is much different than in the United States. Understanding this difference will reduce anxiety and frustration among US executives pursuing M A strategies in China. To give you a graphic representation think of the process as a ride on Disney’s Space Mountain, a long wait, followed by a plunge into the darkness of twisting turns, hair-raising screams, and emerging at the same place you started. One of the reasons that the identification and relationship phase is so important is the high transaction costs in China, compared to the deal sizes available, so effective “discovery” is important before spending substantive dollars in due diligence. In China, acquisitions require more upfront target cultivation and pre-due diligence than is typically needed in the West. To appreciate this, one need only be reminded that in China the seeds of private investment and the concept of a merger were sown just 20 years ago. China is more akin to a college age individual as it is developing a comfort with markets and corporate business entities. In this podcast, I’m interviewed by Albert Maruggi reporter for the Marketing Edge podcast about the MA landscape as a preview to the GIC presentation this week in Shanghai. | Get your Presentation Pack