China's foreign investment M & A to undertake international industrial transfer and innovative methods of utilizing foreign capital has brought new opportunities, but also the autonomy of our strategic industry development and national economic development brought about by the negative effects that can not be ignored
In recent years, foreign direct investment in China there have been some changes in a large number of mergers and acquisitions of domestic enterprises to enter China. 2004, M & A in the form of foreign investment on China's direct investment accounted for only 5% in 2004, this proportion rose to 11 percent faster in 2005, nearly 20%. Of particular note is the number of transnational corporations and foreign investment funds to China the focus of a number of industry mergers and acquisitions businesses. In 2007, foreign mergers and acquisitions is still active, but business, government has become sensitive for foreign mergers and acquisitions and prudent, and there were some new signs: focus on the policy of acquisition of the bulk of low sensitivity of the area of consumer goods; mergers and acquisitions tend to target the object of private enterprises; directory list of sensitive sectors longer; high sensitivity of industry mergers and acquisitions more difficult. It can be said that in 2007, is the acquisition of foreign capital have matured and rational one.
For foreign mergers and acquisitions in 2007 event, we invite the Dacheng Law Firm, Senior Partner, the Beijing Bar Association Committee, director of venture capital to make professional counsel Biao Lu interpretation.
Case I: M & A Xugong Carlyle
Xugong is China's equipment manufacturing industry leader. Carlyle, the world's largest private equity investment funds, as a result of a number of state leaders in important positions in the Fund, is a "presidential club" known as the United States institutional investors.
Carlyle to buy Xugong opera is full of twists and turns. Increased from the initial acquisition of 85% to 5 months ago 50 percent, then dropped to 45 percent today, the acquisition of Carlyle absolute idea into a holding shares. Reduce the proportion of the acquisition, the purchase price is still rising. Moreover, the acquisition needs to be approved by the State or approved by the departments concerned to take effect.

Prior to this, Carlyle said, the company will wait for the Ministry of Commerce made a final decision on the matter and will not negotiate further on this issue, if approved, the contract automatically extended to the date of approval, if rejected, Carlyle will not be to make concessions directly from the acquisition.
Interpretation:
For mergers and acquisitions Carlyle Xugong triggered public concern and the strong response, in fact, is the people, national economic security of the beginning of the awakening of consciousness is concerned about economic security industry. Course of the incident so that we can see that public opinion on the commercial negotiations as well as the impact of national policies, but also the course of a lively game feel all the "degree" of the master.
The so-called elite who had self-examination, said the people, "Boxer" in violation of the emotional rules of international commerce, thereby affecting Xugong Carlyle on the acquisition, which is a completely wrong understanding. In fact, foreign investment for national security review of mergers and acquisitions is not unique to China. Many countries, especially developed countries the corresponding control measures to prevent the impact of foreign investment in its own national security and economic security. Such as the United States on the establishment of the foreign investment committee, responsible for U.S. companies on foreign mergers and acquisitions affect U.S. national security review.
Case II: M & A Wahaha Danone
In 1996, Danone and Wahaha have been a marriage of the Strange Bedfellows: Wahaha and Danone, Peregrine Investment Holdings of gold plus a joint venture company Wahaha joint venture.
As a result of the impact of the Asian financial crisis, Peregrine will increase its investment in gold shares sold to Danone, the company added up to become a holding company exclusive. Wahaha joint venture will become a holding up to 51% of the joint venture.
As a result of the impact of the Asian financial crisis, Peregrine will increase its investment in gold shares sold to Danone, the Canadian company has become the exclusive holding company Danone. Wahaha joint venture will become a holding up to 51% of the joint venture.
Ten years later in 2006, amounting to four billion trying to use non-price acquisition of Wahaha joint venture 51 percent stake in the global attention led to the "struggle Tevershall."
A whole year in 2007, the government, enterprises, media, lawyers and other stakeholders and parties outside the industry to participate in their "struggle Tevershall" big discussion. However, so far, "Tevershall dispute" is still not over.
Interpretation:
Into a legal quagmire for both Danone and Wahaha is the outcome of a double defeat. Judging from the current situation, the State Council approved a trademark from the Wahaha trademark holders the possibility of a joint venture does not exist, the founder of Wahaha Group and Zong Qinghou, Wahaha should not give up and start all over again the national brand. Can not be in the Danone Wahaha brand alone holds the premise to solve the incident Danone Wahaha无外乎following manner:
First, Danone, Wahaha reconciliation: the case in Hangzhou arbitration process, a representative of Danone offered to reconciliation, have been flatly rejected Wahaha side. But this does not mean the parties is Wahaha and Danone declined to reconciliation, but the need for a litigation strategy. With the development of the situation, various intermediate forces, including the Government's express and implied, as well as the needs of the interests of all parties can make to reconciliation events.
Second, third-party involvement in the reorganization: whether the acquisition of non-joint venture, Wahaha joint ventures or equity restructuring, "white knight" of the intervention will play a crucial role. In litigation, the prospect of arbitration basic analysis, this strategy should be put up to consider the status of essential. Danone has been the investment necessary to obtain the excess return, to the lifting of the cross-border marriage, but also to the Danone Wahaha adequate financial compensation regardless of how much "dowry."
Third, through litigation, arbitration to determine ownership of trademarks. The problem is that the case is not just a question of law, so to rely solely on the law will not solve the problem. Ruling can not solve deep-seated problems: Danone trademark ownership of its business in the Chinese market is also difficult, and the vehicle in front of the Robust still ringing in the point, Wahaha trade mark is not optimistic the future will be; trademark ownership of Wahaha Group, its should also bear the corresponding responsibility is not optimistic.
Case III: The French M & A SUPOR SEB
Carlyle Xugong intense mergers and acquisitions and multi-stakeholder disputes outstanding game, the world renowned giant of French cooking cyberspace SEB SUPOR China M & A Inc., a heated argument has emerged. Approval throughout the period, the continuing rise SUPOR shares, stock prices from 15 yuan a whole more than doubled.
April 11, 2007, France International, Inc. SEB SUPOR the ultimate success of the acquisition, SEB SUPOR Group will hold 61% of the shares, for the actual controlling shareholder. It has also become China's antitrust review of the implementation of the system of the first hearing the case.
France SUPOR SEB in the process of mergers and acquisitions by competitors from SUPOR resistance imposed. Homestead love, double happiness, Shun Fat, such as six companies have signed in Beijing "emergency statement" absolutely opposed to the French group SEB SUPOR Holdings. They believe that cooking SUPOR market segments in China, a high share, France SEB Holdings will form a monopoly by foreign investors of the pattern of the Chinese market, hoping to stop the relevant departments "to endanger the survival of industries and enterprises," the monopolistic mergers and acquisitions.
Interpretation:
In accordance with the September 8, 2006 the Ministry of Commerce jointly issued by six ministries of foreign mergers and acquisitions of new laws and regulations, "foreign investors on M & A provisions of domestic enterprises," the state's key industry, "China Well-known Trademark", such as anti-monopoly review of the approval must be included in the scope of . Domestic related industries and associations, there is competition between the enterprises, mergers and acquisitions can be asked to carry out the review of national economic security. SUPOR continuous release of the six competitors against the acquisition, but not as a result of the implementation details of this provision, so that the approval to become SUPOR 1:00 suspense. To this end, the Ministry of Commerce has to the China National Hardware Association, China Light Industry Federation for advice.