American Appraisal elaborated further on the topic of Valuation Practices in China and emphasized the general “Rules of Thumb” in “Safeguarding State-owned Assets”. According to the consulting firm, valuations more than 15% below the book value of assets would usually receive careful scrutiny. Besides, the negotiated transaction price must not go below 10% of the appraised value. In addition, all assets contributed by the Chinese side in a joint venture will usually have a minimum value of 15% of cost, regardless of condition of utility.
Furthermore the American Corporate Danaher, held another presentation on Leverage Optimal Deal Structuring and Addressing Key Deal Completion Issues to Achieve Desired Results during the summit. The Danaher Corporation is a large American global active company headquartered in Washington, D.C., United States. Its products are concentrated in the fields of design, manufacturing, and marketing of industrial and consumer products.
First of all, Danaher addressed typical issues of doing deals in China which include financial, management, legal and compliance issues. With regard to financial issues, Danaher highlighted the importance of revenue supervision and stressed in particular the lack of internal financial control and the underpayment of benefits. Referring to management issues, Danaher emphasized the lack of 2nd tier management talent as well as the lack of clear division of roles and responsibilities. Finally, Danaher stressed the topic of legislation and compliance with regard to sales and marketing issues, export control and consignee ownership.
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