According to Danaher, the third challenge of doing deals in China lies in the underestimation of compliance and the impact of the Foreign Corrupt Practices AC (FCPA)t. The FCPA risk is very high in China, particularly in the healthcare industries. Therefore, thorough due diligence is required, in order to identify risks and adequately estimate the negative impact to business after the deal is finished. Thus, Danaher recommends to actively manage risks by means of contract protection or comprehensive compliance programs.
The last challenge mentioned by Danaher is the choice of the wrong target partner or joint venture partner. It considers the necessity of getting to know the seller well during the presales process. Equally important is analyse the products you are buying as well as to think through the implications of the acquisition. Finally, Danaher recommends heightened vigilance with regard to over-optimism about synergies and the needed time-span for implementation.
At the end of the event, Danaher discussed several kinds of mitigating actions. According to Danaher, thorough and prioritized due diligence as well as correct base case projections and scenario analyses are required during the deal process. Moreover, identifying the list of key employees and developing a retention package are of particular importance. Furthermore, adequate proactive clauses in the sales purchase agreement and innovative deal structuring are necessary. Finally, Danaher suggests to implement a waiting period between signing and closing in order to design a comprehensive compliance program.
Viewed as a whole, the 12th Annual China Mergers & Acquisitions Summit provided participants with a great opportunity to meet key officials and industry leaders in the field of inbound and outbound M&A so as to obtain first hand knowledge of regulatory changes, future investment trends, successful strategies and best approaches for M&As and strategic partnerships in China.
Dieser Post ist auch verfügbar auf: Vereinfachtes Chinesisch
