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Overseas M&A

   Overseas M&A refers to one entity in Country A purchases equities or assets in Country B through certain approaches and methods of payment. An overseas M&A involves entities in two or more markets under different jurisdictions. One Multi-National-Corporation is called the Initiator or Buyer, while the other party is called the Target or Seller. The certain approaches include Direct Investment from the Initiator towards the Target, investment from the local branch of the Initiator towards the target. The certain methods of payment include cash payment, leveraged payment, stock swap, etc..

   China started the Foreign Direct Investment quite recently compare to the developed countries. In the early phase, 1980s, the major forms of investment were participating in new constructions, overseas project contracting, labor exporting etc.. Since the 1990s, China has speeded up the pace of FDI. The forms of investment gradually switch to Overseas M&A.

   The development of Overseas M&A from Chinese enterprises can be divided into two stages.

   Stage I: From 1992 to 2000.

   In this stage, the first peak of FDI emerged. The investment concentrated in mechanical & electronic products, textile products, etc… These industries and products are popular among the local consumers. Geographically, the investments were located in the African and Southeast Asian countries that China had trade contacts. Generally speaking, the investments in this stage were experimental with small M&A sizes.

   Stage II: From 2000.

   After joining in WTO, the second investment peak of FDI appeared. The total FDI volume rose from over 2 billion USD in 2000 to 65 billion USD in 2012. During this period, Chinese enterprises realized that they have to merge into the world economy for further expansion in the future.

   By utilizing own research capability and extensive information channels, Huaran is able to discover a target with the most growth potentials while matches the requirements for M&A. Our preliminary research would help both sides to eliminate the information asymmetry and reduce potential transaction risks. Based on our years of experience, Huaran has built up a fine M&A Process Management System. By utilizing the System, we have accomplished multiple M&A transactions for MNCs and local enterprises with the deal size up to Billions of Yuan.