Seven steps that can spell cross-border M&A success for Chinese companies
Enterprises can navigate the difficult M&A terrain if they pay heed to some important factors, say experts
● Respect different viewpoints: Showing you are listening to the other organisation and taking into account their considerations will help motivate them to do their day-to-day business, says Carl-Johan Skold, director of Shanghai-based Stenvall Skold and Company.
● Retain top talent from both companies: Talent retention is important, but it is also important to ensure that they are aware of the benefit of the acquisition. Bain’s Phillip Leung says it is also important to figure out a plan B. “What if the person takes the money and goes. The management team may get rich because of the deal and they probably don’t want to work anymore, or don’t need to work anymore.”
● Do proper due diligence: Invest in due diligence and plan the integration before the merger actually takes place.
● Have a clear idea of the M&A strategy, benefits: It’s not enough to just have the right attitude and move fast, says Skold. “The companies that have done well have a clear strategy in place. Before they make an acquisition, they have a clear idea of what they want to achieve and how it lends synergy to the company.”
● Have a dedicated M&A team: European and US companies have a dedicated team for mergers and acquisition-related work. However, Chinese companies often have to reassign people to a merger on top of their regular work.