Basic understanding of Cross-Border M&A

Mai Doan
20 May 2014
Why use M&A strategy?

From the buyer side:

1. To enter a new market
2. To have network foundation
3. To secure control over the business

Source: Widen.com 05, 2014

Why use M&A strategy?

From the seller side:

1. <49%: to expand with a
strategic partner but still
have control over the
business.
Source: Genequity Co 2. >49%: because they
05, 2014
can!!!
3. 100%: to retire, get the
cash and move to another
business
How do they do that?
1. Horizontal acquisition: same industry
 M&A between companies in the same industry
2. Vertical acquisition: in the supply chain
 M&A between companies in different stages of the
supply chain or distribution channels.
3. Related acquisition: related industry
 M&A between companies in highly related
industries.
Wait, so what is M&A?
 M&A= Merge and Acquisition
 Just another corporate
strategy?
(There are different levels in an M&A transaction based on
how it is done.)
1. Merge: Company A and
Company B are willing to
comes together co-equal
basis.
2. Acquisition: Company A
buys Company B’s stock in
order to have management
control.
3. Take over: Company B could
Source: Strategic EHS 05, 2014
not resist being hostile take
How about cross-border M&A?
 Still exactly the same thing but more complicated
because:
1. It’s a cross-border transaction.
2. Legal barriers are more complex.
3. The gap between business cultures is larger.

And so many other things needed to be considered.

Source: Business Technology

05, 2014
For those who are still being confused out
there, cross-border M&A is a concept in
which…

1. It’s an international “marriage” between two

companies to form a “family”.
2. The two parties will be responsible for the
“family” finance and management strategies.
3. The two parties will share the profit/loss
accordingly.
 Cross-border M&A between Japan
and Vietnam in 2013-2014
Year Acquirer Acquired Type $Value Industry
2014 Mitsui&Co Minh Phu Hau 30.77% 19 m Seafood
Giang Seafood
Processing
2014 En-Japan Inc Navigos Group 89.8% 22m Human
Resource
2014 Showa Denko Rexam-Hanacans 91.75% - Chemical
K.K. JST
2014 Undisclosed Vina Properties Pte - 16m Hotel

2013 Asahi Glass Phu My Plastics & 93.11% - Chemical

Co Chemicals Co
2013 Undisclosed Premier Oil Vietnam - 45M Oil
South BV
Source: Merger Market 05, 2014
Here is just a review

 Cross-border M&A really helps to overcoming

entry barriers into new market.
 It also saves cost but adds more skills and
capability for new product development.
 And it definitely create added-value and
reshapes your competitive scope.
Thank you!!!

The concept of M&A and all the “tricks” along

with it have been written in piles and piles of
books. Please note this presentation serve
the purpose to simplify the idea of cross-
border M&A for a clueless person like myself.
Hope it helps to introduce you to this fun and
exciting remarks of the finance industry. I’m
looking forward to having more to add on this
topic. Anyhow, good luck!!!