A booming economy, huge manufacturing base, endless supply of natural resources and expanding consumer spending, it is no surprise that China is high on the agenda for businesses around the world.
At one time, foreign companies looked to China primarily as a source of low-cost labour. However, as Chinese manufacturers grow more sophisticated and product quality has improved, foreign companies are now seeing even greater business opportunities. This in turn has stepped up the pace of mergers and acquisitions.
China’s rapid growth has also led to the emergence of a middle class with considerable purchasing power and enormous potential. Foreign companies are eager to tap into this market, and are investing in R&D centres to better understand local customer preferences and develop targeted products.
The Challenges
Despite the appeal of M&A to both foreign and domestic firms as a way to improve competitiveness or to grow, formidable challenges still remain. According to a report carried out by The Economist it estimated that roughly 60 to 70 percent of M&A ventures have failed to increase shareholder value.
One reason for this mediocre record of M&A ventures is due to companies spending fewer resources justifying an M&A initiative in China. Failed M&A represents not only a loss of invested capital but also a lost opportunity to profit in the future from the rapidly expanding Chinese market. Companies who are seeking to make acquisitions in China need to devote greater time and effort to minimize the risk of failure.
What we offer
Our China M&A team has extensive industry knowledge and local transaction experience, and can leverage upon the vast resources across GPS China’s global network to assist you with your expansion or divestment needs in China.
GPS China’s M&A lead advisory team focuses on middle market transactions, with an emphasis on cross-border M&A's. Our services are delivered with efficient project management and appropriate cultural sensitivity by a dedicated multilingual team of experienced M&A specialists based in Europe and China.
Our range of services includes:
Lead advisory on mergers, strategic acquisitions / investments and strategic disposals
Public company advisory
Management buy-ins/buy-outs
Venture capital advisory
How we add value
GPS China’s unparralled network of contacts across China and around the world make us ideally placed to bring together the most appropriate buyers, sellers and partners. Our ability to provide advice with integrity, objectivity and independence enables us to form strong long-term working relationships with our clients.
From our years of experience operating in China and across a broad range of sectors we have learnt that it is not until you are actually in China doing business that you can fully understand the following;
How markets work
How financing works
How relationships work
GPS China strives to bring both people and businesses together from all ends of the globe and support them in achieving their strategic visions.
he Challenges