IFLR Asia M&A Forum day one: key takeaways

Author: IFLR Correspondent | Published: 2 Mar 2017

Reporting by Brian Yap, IFLR and Karry Lai, Asialaw

Chinese outbound M&A: challenges and opportunities

In recent years sellers in the US, even those from the Midwest, are becoming more familiar with Chinese buyers;Termination fees and cash deposits required by foreign sellers of PRC acquirers have been around for years;But because of last year’s tightening of capital controls foreign sellers, fearing the Chinese buyer’s failure of obtaining relevant PRC regulatory approval and the Committee on Foreign Investment in the US (Cfius) approval;Foreign sellers are now much more worried about their Chinese counterparts’ ability to settle outbound transactions and therefore require them to prove that they have sufficient offshore cash;Because of the tightening of capital controls, PRC enterprises are increasingly raising dollar debt offshore and establishing an offshore subsidiary in Hong Kong for acquisition financing purposes;Sectors such as consumer brands, telecoms, healthcare have increasingly targeted by PRC corporates;But in...