Often entry into China is accomplished through an acquisition or merger with a local company. Laws governing the acquisition of a Chinese registered company are complex and often require the insertion of an intermediary subsidiary to maximize flexibility and tax benefits. A domestic company acquired by a foreign party renders the resultant entity being a “foreign or foreign invested domestic legal entity” which operates on slightly different and often confusing rules.
At IPO Pang, we have handled the negotiation, drafting and closing of hundreds of mergers and acquisitions, representing either the sell side or the buy side, giving our firm a solid grip on the customs and practices in this area of the law. In China, the law is to be followed, the custom is to be respected and the practice is to be adhered if the transaction is to be closed on time and on budget.
The hang ups in most cross-border M&A transactions lie in poor due diligence, inadequate understanding of the regulatory, legal and political risks of a transaction, and grossly underestimated the timetable to complete the transaction and to effectively integrate the target into existing operations. We assist our clients from inception of the deal through final closing, including post-closing integration and purchase price adjustments where warranted.
Industries we have had experience include:
At IPO Pang, we often represent the foreign party on an acquisition or divestiture on a hybrid fee structure where we share the risk with our clients to ensure the transaction is consummated to our client’s satisfaction. On the sell side, we often work with our clients to maximize value and minimize legal exposure post sale. On the buy side, we help reduce acquisition costs and risks by identifying potential problem areas through thorough due diligence and investigative work.
We help our clients fulfill their aspiration and eliminate any buyer’s or seller’s remorse.