Allen Shyu Discusses Chinese M&A Activity with CCBJ
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Corporate Counsel Business Journal has featured Akin Gump corporate partner Allen Shyu in the article “Assessing China’s M&A Activity in 2020 and Beyond,” regarding the current state of Chinese M&A activity and the impact of the ongoing COVID-19 pandemic and U.S.-China trade relations, among other world events, on these transactions.
Among the topics discussed:
Impact of U.S.-China trade relations: “The outbound M&A market continues to be strongly influenced by market uncertainties and political restrictions, such as the prolonged and unpredictable U.S.-China trade war and uncertainty surrounding the status of the U.S.-China trade deal. There is no doubt that this will remain a significant factor in the coming months and years, whether by impacting deal volumes, restricting market access, or by valuations being affected by tariffs.”
Challenges of conducting due diligence during the pandemic: “[…] target companies and local communities, especially local and indigenous communities, are particularly sensitive about the COVID-19 pandemic, and are very concerned about contagion, even where it is particularly low. So, Chinese companies are thinking about alternative solutions. For example, they may consider choosing local intermediaries to carry out due diligence, and interviews of management and key employees of the target company may be conducted by local teams onsite and by teams at home via videoconference.”
Benefits of China’s new foreign investment policy: “The Foreign Investment Law seeks to protect the rights of foreign investors and their intellectual property, and it clearly incentivizes them to invest in China. It also helps Chinese companies to move up the value chain. The evolving nature of China’s consumer economy and the desire for Chinese industry to continue to move up that value chain are two particularly important drivers of economic opportunity. These factors are expected to boost inbound M&A transactions in the near future.”
To read the full interview, click here.
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