The follow article written by Damjan DeNoble hits the nail on the head. A few years back, I was involved in advisingto aftermath of a failed M&A project for a global life science client, who was misled by their local management in China on the potential business prospect of a M&A deal in China, which sounded perfect on paper.
Apparently what the local management team failed to assess was the great cultural gaps between the expectations of headquarters in Europe and the reality of the local Chinese company under acquired. The result was a disastrous execution that led to 100% turnover of the staffs at the acquired company in China, and the scraping of most of the assets of the acquired company.
The aftermath also led to a great deal of misunderstanding and distrust between the Headquarters and the Chinese entity which led to the resignation of the Managing Director for China. This story is one of the hundreds of classic showcase in which M&A between American, European and Chinese companies failed because of the poor attention the acquiring company gives to the acquired entity.
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