Cost awareness – a big risk for Chinese overseas M&A

In the past few years Switzerland, located in the heart of Western Europe and economically integrated with the surrounding EU markets, has become increasingly attractive to Chinese investors due to its leading industries, excellent research and development environment, highly educated and trained workforce, leading financial centres, liberal labour laws, low taxes, low national debt and political stability.

We have had several opportunities in the past few years to provide legal services to Chinese companies bidding for Swiss companies, or parts thereof, and to Swiss groups selling companies or licensing technology to Chinese companies.

As we already featured the technical aspects and particularities of Swiss law on mergers and acquisitions (M&A) and initial public offerings (IPOs) in the March 2013 issue of China Business Law Journal (What are the M&A options for Chinese FDI in Switzerland?, volume 4, issue 3) and the June 2013 issue (Delving into the finer details of Swiss takeover regulation, volume 4, issue 6), we take the occasion of this special overseas M&A issue to feature three obstacles that we have seen typically arise in M&A transactions involving Chinese bidders.

Felix W. Egli is senior partner and head of China desk, and Wu Fan is a China Desk counsel at VISCHER, Zurich and Basel (www.vischer.com). They can be contacted respectively on +41 58 211 3490 and 3645, or by email at fegli@vischer.com and fwu@vischer.com