Global Integration Success – A China Perspective

In the growing cross-border deal environment, China often commands the center of attention due to its scale and complexity. Integration success in China is achieved through intentional planning and extensive cross-border collaboration.

Deloitte is pleased to release its latest perspective on key factors to successfully integrating cross-border M&A deals in China.

As large, cross-border M&A deals continue to grow, effective integration in China becomes increasingly important. The country's unique scale and operational complexities command additional attention in specific areas from global and local leadership. This article takes a closer look at areas proven to be especially important in our experience of guiding our clients through their challenging global integrations.

Selected key points discussed in detail within the article:

  • China's growing importance: China M&A market (inbound and outbound) grew rapidly at 4x the global CAGR, and now accounts for >15% of total global deal value
  • Discussion on the importance of managing China integration within international mega deals. Both acquirers and targets tend to have significant China elements due to the sheer size of China operations
  • Complicated labor and tax regulations in China and reliance on global systems often demand intermediate integration phases to minimize risk and improve planning efficiency
  • A dedicated channel with a China based integration team is essential to minimize communication issues to the global integration team and other cross-border stakeholders
  • An influential China IMO is required to set integration milestones that account for dependencies and country-specific operations
  • Addressing people redundancies are typically not part of synergy plans due to growth potential in China – challenging traditional HR synergy activities
  • Quick wins build confidence and support for integration from employees, customers, and investors. Also, the analytical driven culture of China operations appreciates quantifiable synergies which serve to build momentum from each and every quick win success  

As cross-border M&A proves to be an increasingly popular channel for global growth, the importance of successful integration in China is ever stronger. Our successful track record of facilitating our clients' integrations in China has emphasized the importance of catering integration approaches to China's unique challenges as well as its ties to global processes. We remain committed to helping our clients capture benefits from China's growing market through cross-border M&A activities.

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