M&A Strategies in China: Acquiring a Domestic Entity
October 02, 2002 | BY
clpstaff &clp articlesA number of different strategies are now possible for foreign investors in acquiring stakes in a domestic entity in China. It is easiest to examine some of the more common choices if we present a hypothetical case study.
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By Emma Davies (Senior Associate) and Glen Ma (Legal Assistant), Clifford Chance, Shanghai
To keep things simple, the target business used here is not a listed company. Neither is it in a “sensitive” economic sector where foreign investment is restricted or prohibited or where Chinese law imposes a ceiling on the foreign investor's equity holding. The issues raised are therefore common to all deals in China, whether the target business be a toy manufacturing plant in Chengdu or a software company in Beijing.