EY Strategic Growth Forum™ session highlight
Panel: Transactions in China
With so much data showing us that a vast majority of deals fail, here’s what our panel think the key ingredients for the “right” deals in China are:
- Stay for dinner. When you meet with businesses you are trying to acquire, spend time getting to know them outside formal meetings.
- Translate the gaps. If you don’t speak Chinese make sure you have a translator who can translate the meaning, not just the words.
- Not all in the name. Find who the principal is on the other side, it’s not always in the job title.
- Mutual trust. Establish trust on both sides of the table by understanding the underlying aspiration, co-operation and then you can share a vision and objectives.
- Take your time. Understand that some things will take longer than in Western culture, so build relationships that last for years, not just the six months after the deal.
Assuming that you can complete a deal in China, the panel also reflected on the importance of information systems in creating value in China. They all agreed that when it comes to M&A, having a good information system is critical because if you can control the information you can control the money.
The panel was moderated by Erica Su, Partner, Transaction Services, EY; Wu Yibing, Head of China, Temasek China; Jennifer Li, Chief Financial Officer, Baidu Inc.; Bernie Stefan, Vice President Strategy & Business Development, Nestle, Greater China Region; Allen Lueth, Vice President Finance, Cardinal Health.