How China's companies can succeed overseas
June 29, 2012 | BY
clpstaff &clp articles &Chinese outbound investment reached $128 billion last year and is set to increase to $800 billion by 2016. China Law & Practice has produced the definitive guide to the risks these Chinese companies face
State-owned enterprises (SOEs) like Bright Food, who bought British breakfast cereal giant Weetabix in May (see Interview: How Bright Food bought Weetabix) are leading this trend. Bright Food announced another groundbreaking deal this week – a 70% stake in Bordeaux wine exporter Diva.
SOEs are not the only players though – last month Dalian based Wanda Group bought AMC Entertainment Holdings for $2.6 billion. The deal sees Wanda expand its cinema base into the US, creating the world's biggest cinema owner.
But what about the risks involved? Chinese companies face a completely different landscape when going abroad. Many minority investments will be made through a joint venture company, creating concerns over the protection of minority shareholder rights.
Other risks include: stringent employee benefit and workers' compensation regulations; strict environmental liability laws; different statutory reporting requirements and class action litigation for IPO and prospectus-related liability.
The China Outbound Investment Guide 2012 analyses these potential risks and provides practical steps to ensure investments remain protected. It is an indispensable tool for anyone engaging in outbound investment.
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