China Acquisition Challenge #1: Finding an Appropriate Candidate
The first challenge involves finding an appropriate acquisition candidate. The firms that are soliciting acquisition partners only rarely surface the right candidates, and these opportunistic approaches are quite unlikely to be successful. A proactive, strategic approach must start with a clear definition of the characteristics of a credible candidate, which might be quite different in China than in western markets. Finding a candidate firm that matches the criteria defined by a firm’s China strategy often involves a complex process that begins with large numbers of candidate firms and ends with a few candidates that are plausible, but flawed along some dimension. Successful acquisitions in China often require an accompanying investment plan to close gaps between what is needed and what is available and to address the flaws of the available firms. For a new research paper on this topic, see our Publications page and order Three Strategic Challenges in China Acquisitions.