CROSS-BORDER M&A ASIA AND EUROPE

This session addressed the growing M&A activities of Asian investors in Europe, with a focus on Germany. Wei Wang (PwC Germany) led the panel, which included Dr Mei Wu (Joyson Holdings Europe GmbH), Jacob Hoyeon Won (Locus Capital Partner, the ally of Global M&A Partners), Dr Qing Ding (Shentou Capital) and David Dai (MWE China Law Offices).

All panellists agreed that the current trend of Asian investors conducting transactions in Europe will be long-term. This is particularly true of Chinese investors, which have been con­sistently reaching new heights in terms of deal intensity and volume during the years following the last global economic crisis. The panellists also shared the view that, contrary to the overwhelming public consensus in Europe, the governments of both Korea and China do not play the dominant role in cross-border transactions that is typically attributed to them.

In Korea, interest in cross-border transactions does not come only from the country’s large conglomerates (known as chae­bols) that conduct strategic investments. According to Mr Won, the Korean private equity industry is playing an in­creasingly important role this area.

Dr Ding, who previously worked in Germany and founded a joint venture with JD Capital, a leading Chinese private equity firm, discussed Chinese buyout funds as new invest­ment force from China. He emphasised the obvious and sizeable synergies in place and to be realised between Chi­nese investors and European companies concluding a close cooperation via share participation, and stressed the strategic considerations of Chinese private equity firms, which mostly go hand-in-hand with a strategic partner. Mr Dai confirmed that despite the current concerns about shrinking foreign re­ serves, the Chinese government has been easing the approval requirements for outward investments, and that Chinese buy­ers have become increasingly professional.

Mr Dai’s point is exemplified by Joyson Holdings, founded by Jeff Wang in 2004. Joyson has acquired six Western au­tomotive suppliers since 2010 and, in completing these land­mark transactions, has changed the competitive landscape of the respective industry. Joyson is seen as the best example of successful Chinese strategic investment in Germany and has encouraged a number of Chinese entities to follow suit and invest in Germany. Dr Wu explained Joyson’s deal rationale for a variety of representative take-overs and how it managed the post-merger integration processes. For Joyson, a good un­derstanding of different corporate cultures, respect, willing­ness to learn from one another and a focus on the essential business basics are core factors to successfully grow into a transnational group.

Finally, Mr Wang gave an overview of certain facts related to Chinese investment in Germany. He noted that the feared buy-and-close-down by Chinese investors never has hap­pened in Germany, and that in 2016 the number of Chinese state-owned enterprises conducting transactions in Germany fell from 50 per cent (the previous status quo) to below 20 per cent. With over ten billion Euros’ worth of transactions, 2016 may have been an exceptional year, but the Chinese M&A wave will not come to a halt anytime soon. With China’s por­tion of foreign direct investment in Germany at just 0.4 per cent, there is sufficient space for improvement.

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Bilal Sayyed, McDermott Will & Emery, moderated a thrilling panel of acitivist shareholders from three juristdictions: Roy Katzovic of Saddle Point Group, United States, Till Hufnagel, Petrus Advisers, London and Dr Olaf Marx of MCGM, Munich. They were joined by A&M Managing Director Germany, Thomas Kolaya. Mr Kolaya advises companys how to avoid to become a target of activist shareholders. The panel was a fabulous finale of the conference.