Dive into the secrets of due diligence in M&A with RTHK – The Close, featuring Maëva Slotine. This episode explores the nuances of due diligence, from identifying red flags to the differing approaches of buyers and vendors. Discover valuable strategies for navigating cross-border transactions and learn how to prepare effectively for acquisitions. Tune in to enhance your understanding of this essential process.
How can you make sure you’re getting your due diligence right?
🚩 Red Flags: Identifying potential deal-breakers early is crucial. Common red flags for Chinese companies include mandatory social security contributions and the heightened cost of running the business after an acquisition by a foreign shareholder.
✅ Buyer vs. Vendor Due Diligence: Vendor due diligence allows sellers to anticipate the sale process and take action before starting the process, while buyer due diligence identifies hidden risks that could trigger a renegotiation of the price.
🌍 Cross-Border Co-ordination: Effective project management is essential for smooth cross-border due diligence. Clear roles, standardised checklists and reports, and transparent communication are key to success.
💡 Advice for Business Leaders: As a vendor, put yourself in the shoes of the buyer – make it easy for them to understand your business. As a buyer, don’t delegate the review of the due diligence report – get involved to truly understand what you’re buying.
Photo credit: Romain Jacquet-Lagrèze