The security service company for overseas business expansion or the introduction of foreign capital or brand security, through the "go out" or "please come in" approach, take investment, acquisitions, mergers and acquisitions, financing, joint venture (cooperation), joint-stock transformation (IPO) and other ways to set up some security companies overseas or domestic joint venture security service company (mainly is the Chinese enterprises to focus on the national high risk area HRA). On the basis of summarizing the main legal risks of overseas acquisitions and financing of Chinese enterprises, the paper puts forward countermeasures for risk management, for reference, and does not constitute investment advice.
1. transaction locking / certainty risk
Risk analysis: in addition to some special cases (such as sellers for some reason, for example, bankruptcy, they must sell related assets in a short time), sellers generally occupy a relatively dominant position in international M & A transactions. To China security investors, a common risk in the future is not a small investment of manpower, time and cost, the seller signed an agreement with other investors, resulting Chinese investors eventually lose investment opportunities, and the initial investment and consumption waste.
(1) Chinese investors need to continue to judge the seller's selling intentions and changes from the beginning of the project. A relatively simple basis is the way the other party deals with: whether the seller uses "one to one" negotiations or the form of bidding. Relative to the form of bidding, the seller is more determinable by the buyer in a one to one way. The seller's grasp of the rhythm of the communication process is also an important source to judge the seller's intentions, such as whether the Seller agrees to start negotiations with Chinese investors exclusivity. In addition, Chinese investors should consider obtaining relevant information from various formal or informal channels to assist the seller to judge the sale intention.
(2) from the perspective of communication strategy, Chinese investors can consider discussing the key business points with the sellers at the earlier stage of the project, so as to ascertain whether the two sides are likely to conclude the transaction as soon as possible, so as to reduce the waste of initial investment. If investors China determined intention to carry out transactions, then it should be as far as possible in the project to the seller that will complete the transaction, and convincing evidence that the China investors really have the ability and experience to complete the transaction with the seller in a short period of time, so as to guide the seller termination and other investors to communicate, gradually increase the degree of uncertainty of transaction the.
(3) whether it is a way of negotiation or bid form, China investors should consider at the right time (especially the judge China investors relative to other potential investors, has been in the lead is very obvious in the case of requirements), signed an exclusive agreement legally binding with the seller, the transaction will be locked in a certain period of exclusion.
The risk of 2. trading architecture
Risk analysis: in overseas M & A transactions, if the architecture is not properly designed, an important risk is that it may have an adverse tax impact on investors, for example, investors' dividend payments may be subject to higher taxes.
In addition, the improper trading structure may also prevent investors from achieving their investment purposes. A more common case is that Chinese investors may still want to continue to manage the acquired business with the help of the seller (maybe shareholders and management) after buying family businesses in Europe. If Chinese investors buy all the sellers' shares, the sellers may not have strong motivation when their shares are completely withdrawn. They will continue to devote energy to management of the target business as a management.
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