Merger and Acquisitions in China 2013

Transcription

1 HK Law Society CPD 6.5 Hong Kong 10 May, 2013 English Shanghai 16 May, 2013 Putonghua Supported by

2 Background As Chinese market continuously booms, Merger and Acquisitions ( M&A ) activities in China have increased dramatically in recent years. However, to have a successful takeover transaction in China is far from being an easy task. Tremendous failure cases are caused by various hiding problems and pitfalls, affecting not only the operations in China, but also worldwide businesses. It is not uncommon to see multinationals pay billions costs due to accounting frauds of the acquired companies. To make it more complex, it is reported that the investigation focus of State Administration of Taxation is M&A activities in China. Are you aware of government s scrutiny on M&As in China? How to avoid the pitfalls and frauds by due diligence? What is the proper tax structure for you? Are you clear about the employment and business issues in the integration process? In this full-day M&A Forum, PEO is honored to have invited a group of eminent speakers to share with you their insights into the hot issues of M&As in China. A wide range of topics including the regulatory framework, structuring options, due diligence and recent regulatory developments will all be explored to help you achieve successful business transactions in China. Forum outline 1. The latest development of Chinese government s scrutiny on M&A in China: regulations, key matters and experience sharing The regulatory environment for foreign investors: legislative background, supervision system and interaction with government agencies Market entry, national security and anti-trust review: the pitfalls, regulations and uncertainties How will the scrutiny affect your transaction: transaction restructuring, protection clause, post-deal benefits protection and others Experience sharing on national security and anti-trust review: analysis on documentation, interview, review process and uncertainties Government s supervision on indirect M&A with offshore structure: anti-trust, related transaction, FOREX registration and tax compliance

3 How to communication with government agencies: the experience and lessons learned Zhi Bao Former MOFCOM Officer Partner, FenXun Partners 2. What is the proper corporate structure for your transaction? (Hong Kong Session Only) Eugene Gu Senior Associate Cadwalader, Wickersham & Taft LLP 3. Tax Restructuring in M&A Tax implications on different deal structures: Equity deals VS. Asset deals Tax efficient holding structure and the impact of anti-avoidance rules tackling indirect transfer Foreign exchange and fund flow in M&A Simple method to identify common tax problems during due diligence Bolivia Cheung Director, BC Advisory Co Ltd 4. Legal due diligence and risk evaluation Legal due diligence process Analysis on Target s structure: corporate structure, shareholders, Business License, Capital Contribution Verification, etc. Investigation on business contracts and risk analysis on major lawsuits Common risk in China s current M&A practices Use of legal due diligence results in transaction preparation Zhang Yi Partner, King & Wood Andrew Fu Partner, King & Wood 5. Financial due diligence in China What s wrong with Target s financial reports?

4 How to analyze Target s profitability? Common frauds and pitfalls Ricky Wong Partner - in charge of KPMG Southern China Transactions and Restructuring practice, KPMG Priscilla Huang Partner, Transaction and Restructuring Advisory, KPMG 6. Employment issues you can t afford to overlook Potential Employment Risk involved in an M&A in China How to arrange the employees during the M&A Important players: the government; trade unions and related parties The crisis management and collective bargaining in employee placement Jianjun Ma Partner, Jun He Law Offices Jeffrey Wilson Counsel, Jun He Law Offices 7. Post-merger integration Last but far from least important Hong Kong Session Common risks in today s integration process The complexity of realignment of organizational and management structures Mind the cultural issues Real life case studies Leo Chan Director and Founder, Sino-Bridge China Consulting Shanghai Session New organizations need aligned leadership Arrogance jeopardizes value Culture issues: Organizational more than National There are no Soft Issues Cost cutting may endanger growth

5 A neglected sales force undermines success Middle managers: most needed, least engaged Michael Gui Former Managing Consultant of IBM Global Business Services Who Should Attend CEOs, COOs, General Managers CFOs, Financial controllers, Finance managers Corporate M&A Directors & Specialists Corporate Legal counsel Shareholders & Individual Investors Tax & accounting Advisors Speakers ZHI BAO Former MOFCOM Officer, Partner, FenXun Partners Mr. Bao s practice focuses on foreign direct investment, mergers and acquisitions, private equity, overseas listings and antimonopoly, all disciplines which he made his own during his over seven years with the Ministry of Commerce (MOFCOM) in Beijing and subsequently at a leading PRC law firm. He has worked for such multilateral, multinational and state-owned and private clients as IFC, GE, charter international, Ericsson, Rockwell, CITIC Capital, Baring Capital, Hony Capital, CCB international, China life, China resources, ChemChina, CNOOC, and COFCO. As a key member of the MOFCOM legislation team, Mr. Bao was responsible for drafting a series of regulations in respect of foreign investments, including the regulations for merger and acquisition of domestic enterprises by foreign investors, the measures for strategic investment by foreign investors upon listed companies, and the measures for foreign invested venture capital enterprises, and participated in hundreds of MOFCOM reviews of foreign investments, cross-border mergers and acquisitions and antimonopoly filings. Mr. Bao has pioneered (and obtained approvals for) unique, tested transformations of offshore ownership transaction structures into onshore ownership structures for important clients. Mr. Bao received his legal education from Anhui University (LL.B), East China University of politics and law (LL.M) and University of California, Berkeley (LL.M).

6 Eugene Gu Senior Associate Cadwalader, Wickersham & Taft LLP Eugene Yujie Gu is a senior associate at Cadwalader s Hong Kong office. He has represented acquirers and targets in mergers and acquisitions in the U.S. and China. He also represented underwriters, placing agents, and PRC issuers in equity and debt offerings to international/u.s. investors. He has drafted and negotiated a variety of documents for merger and acquisition transactions and capital market transactions including asset/share purchase agreements, placement memorandums, underwriting agreements, opinions, and comfort letters. Mr. Gu has primarily advised PRC and international clients on issues relating to the U.S. laws and regulations. He worked on mergers and acquisitions and capital market transactions in Hong Kong and United States, representing acquirers or targets in share/asset purchases, issuers or investment banks in securities offerings by issuers in different industries, including an online video streaming company doing business in the PRC, a Chinese airline, a restaurant chain in China, a women s footwear manufacturer, an environmental company in South China, a PRC petrochemical company, a PRC heavy industries group engaged in shipbuilding and offshore engineering, a Chinese telecommunications equipment provider, a Singapore-listed provider of water and wastewater treatment services in China and a real estate developer and operator of high-end shopping malls in Northern China. He further advised on delisting and deregistration matters of foreign private issuers and assisted clients in corporate compliance matters and filings with the U.S. regulators and stock exchanges. Prior to relocating to Hong Kong in 2007, Mr. Gu practiced in the United States for over seven years. During this time he gained substantial experience working on capital market transactions and mergers and acquisitions. He further worked on residential and commercial real estate matters, civil lawsuits, and criminal cases in New York City for over four years. Mr. Gu earned his J.D. from Drake University Law School. He is qualified as an attorney in New York, a solicitor in Hong Kong and further has passed the PRC legal bar. Mr. Gu is fluent in English and Mandarin.W Bolivia Cheung Director, BC Advisory Co Ltd After working in KPMG China for 15 years, Bolivia has retired from a tax partner and now freed up herself for training, education, family, charitable activities and free-lance consultancy projects. Bolivia has stationed in Guangzhou and Shanghai for over 8 years which means a lot of practical experiences in dealing with problems and issues of taxpayers. Her philosophy in China advisory is that taxes arise from business operations and an advisor should integrate business models, fund flow and treasury and other important factors. She is experienced in advising on real estate, M&A, IPO structuring for both listing in China and outside China. Bolivia is the member of both Steering Team of both ACCA Southern China and ACCA Shanghai, part-time tutor on China Tax at the University of Macau and HKU SPACE and the Vice-Chairperson of the Board of Directors of Sowers Action (a charitable organization in Hong Kong). Zhang Yi Partner, King & Wood Areas of Practice Mr. Zhang Yi specializes in PE fund formation and investments, M&A, corporate restructuring and domestic/offshore IPOs, as well as outbound investments by Chinese companies.

7 He has handled a number of key IPOs and milestone transactions involving such industries as manufacturing, pharmaceutical, healthcare and hospitals, mining and energy, banking and insurance, investment funds, telecommunications, automobile, retail, consumer products, real estate, cement, shipbuilding, and public utilities, etc., and also represents PE funds in privatization deals. Mr. Zhang has participated in a large number of M&A deals between Chinese enterprises and international investors by means of private auction and privatization deals of a variety of public utility enterprises in Shanghai, Nanjing, Wuxi and Shenzhen. Mr. Zhang also has extensive experience in insurance law. He serves as a legal counsel for a number of large insurance companies and has participated in acquisitions of Chinese insurance companies by foreign investors. Work Experience Mr. Zhang Yi joined King & Wood in 1996 and is a partner of the firm. Prior to joining the firm Mr. Zhang worked as an in-house counsel for the China National Medicines & Health Products Import & Export Corporation. He received his LL.B. from the University of International Business and Economics, and his LL.M. from Stanford Law School. He also has an Executive MBA degree. Mr. Zhang is both qualified in PRC as well as New York State of the United States. He is also a registered foreign counsel in Hong Kong. He has been elected as a leading Chinese lawyer by many Chinese and foreign journals, including IFLR1000, Chambers Asia-Pacific, Chambers Global, International Who s Who and Asian Legal Business, and etc. Mr. Zhang is a member of All-China Youth Federation, a member of CPPCC Shanghai Committee, a Vice Chairman of Hua Jing Society and a board director of Hong Kong Chinese Enterprises Association. Mr. Zhang is proficient in Chinese and English. Andrew Fu Partner, King & Wood Areas of Practice Andrew specializes in foreign direct investment, corporate, mergers and acquisitions, mutual funds, QFII and QDII. Mr. Huang has extensive experience representing domestic and foreign strategic and financial investors in a number of onshore and offshore acquisitions and Andrew has advised on a number of foreign banks' investments and strategic cooperation with local banks and other financial institutions. He advises domestic and international financial institutions on the establishment or acquisition of joint venture fund management companies. He has also represented a number of leading multinationals and domestic enterprises in their operations, acquisitions and transactional matters. Andrew has advised on the offerings of about 30 open-ended mutual funds and advises major joint venture fund management companies on a regular basis. Andrew is also an expert on QFII and QDII related business. Work Experience Andrew joined King & Wood in Andrew obtained his LLB and LLM from the Shanghai Institute of Foreign Trade. Before joining King & Wood, Andrew was a Partner with Llinks Law Offices. He is proficient in Chinese and English.

8 Ricky Wong Partner-in charge of KPMG Southern China Transactions and Restructuring practice, KPMG Qualifications Master of Business Administration (University of Warwick) Member of Institute of Chartered Accountants of England and Wales Member of the Hong Kong Institute of Certified Public Accountants Experience Ricky joined KPMG Hong Kong audit practice in 1987 and was transferred to Transactions and Restructuring (T&R) practice in During his audit career, Ricky handled a number large of multinational and Chinese audit clients, where some of them are listed in Hong Kong, UK, US and Singapore. Ricky was nominated to second to work in KPMG London audit practice for about two years in He also participated in a number of special engagements relating to M&As, IPOs and investigations during his audit career. In 1999, Ricky relocated to Guangzhou and specialized in providing M&A advisory and transaction services (including financial due diligence) to multinational companies, PRC companies and private equity firms. The M&A transactions that Ricky had led involved overseas companies (e.g. Australian, Dutch, Japanese, Malaysian, Singapore, Swedish, Thailand, US, UK, etc) acquiring PRC state-owned and privately-owned enterprises that are engaged in industries such as consumer and industrial products, real estates, healthcare and infrastructure. Some of the M&A transactions involve private equity firms pre-ipo investments into PRC companies. Ricky also assisted PRC companies investing in overseas countries (e.g. UK, US, Germany, Netherlands, Russia, Thailand, Hong Kong, Macao, etc). Ricky has significant experience in advising clients on deal structuring, deal negotiation and sale and purchase agreement. Priscilla Huang Partner, Transaction and Restructuring Advisory, KPMG Background Priscilla has worked in the KPMG China Transaction Services team since 2003 and previously worked in KPMG China Audit function since During the period of 2001 to 2003, she studies in the United States for her master of business administration degree. Priscilla is a local Chinese partner with over 10 years working experience to serve international clients investing in China. She brings a combination of international perspective and China specific issues focused knowledge to assist in your transaction process. Professional and Industry Experience Priscilla provides due diligence support, technical accounting, negotiation support and other transactions-related advice for multinational companies making investments in China. Priscilla has assisted considerable multinational clients investing in the PRC and has accumulated significant knowledge of the issues facing inbound investments into China.

9 Jianjun Ma Partner, Jun He Law Offices Practice Areas Mr. Ma specializes in labor law, general corporate law and litigation. Professional Experience Mr. Ma has worked extensively and published widely on labor issues in China and he is regarded as a well-known labor law expert in the field. He has been engaged by many multinational corporations and large-scale state-owned enterprises to provide advice on labor related affairs. Mr. Ma has accumulated rich experiences in employment issues with respect to complicated business transactions of mergers & acquisitions, and corporate restructuring, etc. Mr. Ma is especially active in advising clients on issues involving unions and employee representative congress and has extensive experiences in helping clients to resolve collective disputes with their employees, including strikes, etc. Further, Mr. Ma has also represented clients in settlement, arbitration and litigation of labor disputes. Mr. Ma has been engaged by many multinational corporations and large-scale state-owned enterprises to provide advice on reduction in work force and employee transfer issues with respect to mergers & acquisitions and corporate restructuring. In 1993, Mr. Ma joined Shanghai Da Gong Law Firm. In 1995, Mr. Ma founded Dong Hua Law Firm and became its managing partner. After graduation from law school, Mr. Ma worked in Shanghai Judicial Bureau and became its vice secretary-general engaged in both judicial and administrative work and in the management of lawyers in Shanghai Bar Association for a long period of time. Education LL.B., East China University of Politics and Law, Professional Associations Member of All China Bar Association. Arbitrator of Shanghai Labor Dispute Arbitration Committee. Vice President of Labor Committee, Shanghai Legal Science Society. Member of Labor Law Committee, Shanghai Labor and Social Security Institute Honors Labor Lawyer of the Year nominated by CCH in 2004 Labor Lawyer of the Year nominated by CCH in 2006 Leading Lawyer in Labor & Employment nominated by Asia Lawyers & Practice in 2005, 2006, 2007, 2008, 2009, 2010, 2011 and ILO Client Choice Award nominated by International Law Office in 2011 Jeffrey Wilson Counsel, Jun He Law Offices Practice Areas Mr. Wilson specializes in labor law. Professional Experience Mr. Wilson has almost two decades of experience assisting multinational corporations with labor and corporate law matters in the China region.

10 After developing a background in PRC corporate law and mergers and acquisitions, Mr. Wilson has focused exclusively on PRC labor law since He has advised many multinational corporations on labor issues relating to corporate restructuring and mergers and acquisitions. He has also represented clients regarding reductions in force and employee transfer issues, and has drafted and reviewed numerous employment contracts and employee manuals. Mr. Wilson has also advised clients on a stock option, data privacy, and employee benefit issues, as well as issues relating to the employment of foreign nationals in China. He has assisted the American Chamber of Commerce in Shanghai to prepare position papers for submission to National People s Congress and State Council regarding the Labor Contract Law, Implementing Regulations to Labor Contract Law, Employment Promotion Law, and Social Insurance Law. Mr. Wilson has spoken widely on PRC employment law in China, Hong Kong, and the United States to groups including Economist Network, American Chamber of Commerce (Beijing, Shanghai, Chengdu, Guangzhou), and European Chamber of Commerce in China (Beijing, Shanghai, Nanjing, Shenyang, Chongqing, Chengdu). He has also authored articles on PRC labor law for China Law and Practice, International Law Office, and Labor & Employment Law (ABA). Education J.D., University of Washington, 1991 M.A. (International Studies-China), University of Washington, 1991 B.A. (International Affairs), Lewis and Clark College, 1985 Professional Associations Member of New York State Bar Member of American Chamber of Commerce in Shanghai Teaching Instructor in International and Comparative Labor Law at Shanghai University of Finance & Economics Community Service Vice-Chair, Active Kidz Shanghai Language Skills English and Mandarin Chinese Leo Chan BSc (Econ), CA, CPA, MBA Director and Founder, Sino-Bridge China Consulting Mr. Chan graduated from the London School of Economics and London Business School with a BSc(Econ) and an MBA respectively. He qualified as a Chartered Accountant at KPMG Peat Marwick s London office and then moved to work in their Hong Kong Office. His solid education from world-renowned universities and training from a most reputable accountancy firm not only ensure his professional competence but also set a high ethical standard. He gained further international business experience through looking after the whole internal audit function of the Asia Pacific Region of NIKE. He then had exposure to all aspects of managing ventures in different parts of China through various business engagements in China which capitalized on his international exposure and understanding of the Chinese culture.

11 The time in China served to nurture his passion to see it integrate with the international economy as one of the important means to resolve some of its critical economic problems. Above all, the Chinese ventures provided him with concrete insight about the vital need for establishing a bridge between China and the rest of the world for mutual gains. His background in terms of professional competence and integrity makes him an invaluable bridge between China and foreign investors. Michael Gui Former Managing Consultant of IBM Global Business Services Consulting Experience Michael brings 13 years of training and consulting experience to his role specializing in the talent management, and strategic change management solutions for clients. Before joining Right Management, Michael served as Managing Consultant in Talent Development with IBM Global Business Services. He designed and implemented a series of Talent Development programs for leading companies in the China such as Lenovo and Haier, etc. In those transformation consulting project, he got the chance of working face to face with top tier CEOs in China. Business/Organizational Leadership Experience In 24 years of professional life, Michael has worked in both US and China, served multinational companies, private-owned companies, as well as state-owned Chinese companies. In a M&A project, Michael worked as Vice President for Operation in a Holding Group whose business covers electronics manufacturing, textile, GPS services, real estate development, and network games. As an experienced executive himself, Michael also helps presidents and business owners of small-medium sized companies in managing change and improving business operation through transformation and change. Education Michel earned his B.A. in English Literature in and his MBA in Thunderbird, the American Graduate School of International Management. Teaching Instructor in leadership and Change Management at Shanghai University of Finance & Economics.He also teaches in Xiamen University; Zhong Shan University. He also taught leadership, finance, change management, and strategy courses for EMBA/EDP programs in Shanghai Jiaotong University, Xiamen University, and Shanghai University of Finance & Economics. Language Skills English and Mandarin Chinese

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