Attracted by the huge growth potential and the increasing liberalisation of China’s financial services market, foreign companies continue to show great interest in acquiring Chinese institutions, in particular banks and securities companies.
A common point of contention when such deals are explored is the desire by the acquirer to gain management control over the target company. In our experience, however, the notion of a foreign business being able to exercise control over a large-scale Chinese financial institution is illusory. Instead, potential acquirers should focus negotiations on creating partnership structures that allow the two parties to add incremental value to existing operations.
