Asian Mergers and Acquisitions: Riding the Wave

Praise for Asian Mergers and Acquisitions

"Asian Mergers and Acquisitions is a must–read for anyone involved in finance. It′s an excellent comprehensive look at what is now happening with M&A in Asia, what we can expect in the coming years, and, more importantly, how to properly execute a successful merger or acquisition. In reviewing M&A activity in Asia, the authors show us how important such activity has become and how Asia is destined to outpace the rest of the world in the number and value of such deals. This book is bound to get any reader very excited about the promise of mergers and acquisitions in Asia."
Mark Mobius, Executive Chairman, Templeton Emerging Markets Group, and author of The Little Book of Emerging Markets

"Chakravarty and Chua have managed to synthesize a vastly complicated subject matter into a concise and practical guide to M&A in the Asian context. Against the backdrop of a fast developing Asian business scene, they offer unique and timely perspectives and draw on real–life examples to support their arguments."
Anand Balasubrahmanyan, former head of Southeast Asia, Carlyle Asia Partners

"This is a timely book as it presents a view of M&A through a different lens. In particular, it raises two points that are rarely discussed. The first, that youthful Asian companies can use cross–border M&A successfully to break out from domestic market constraints, challenges convention. And the second, that the sheer size and diversity of Asia means regional optimization is a successful way ahead, should be of great interest to Asian M&A practitioners."
Lian Hoon Lim, Senior Vice President, Group Strategy & Planning, Neptune Orient Lines Ltd

"Most books on this subject are written with the Western perspective in mind. With Asia on the rise, this book, with its Asian focus, plugs that gap. Any company who is looking at M&A in Asia will find this book a must–read."
Ng Tiong Gee, Group CIO and Group Chief Human Resources Officer, UTAC Group

"A highly comprehensive book that speaks about the state of M&A in Asia today, Asian Mergers and Acquisitions paints a detailed picture of the characteristics and differences in the Asian M&A landscape compared to the West. Undoubtedly, Vikram and Soon Ghee have coalesced their decades of experience into a book that is indispensable to professionals across all industries."
Yong Kwek Ping, CEO, Inventis Investment Holdings (China) Ltd; Senior Fellow, the Wharton School, University of Pennsylvania; and author of Private Equity in China

Preface xi

Acknowledgments xiii

Chapter 1: Asia Rewrites the M&A Rules 1

Deal Activity Is on the Rise in an Ascendant Asia 2

Natural Progression in M&A, the Asian Way 5

Tomorrow s Winners Are Moving Fast, Today 8

Chapter 2: Asian Companies Are Poised to Triumph in the Merger Endgame 11

The Drive Toward Consolidation 12

Asia s Fragmented Markets Create Opportunity 15

Asian Players Will Drive Local Optima 16

Consolidation Looms for Asia s Nascent Retail Sector 16

The Tale of Two Soft Drink Markets: Why Local Optima Will Emerge 21

Henan Brouhaha Heralds Beer Consolidation Drive 23

Banking and Telecom Sectors Dominated by Asian Champions 25

The Exceptions: Some Industries Likely to Be Dominated by Global Players While Others Resist Consolidation 26

Acknowledgments 29

Chapter 3: The Rise and Rise of Cross–Border M&A 31

The Numbers Point East 34

The Drivers behind Asia s Cross–Border M&A Boom 37

The Risks Inherent in M&A Are More Pronounced in Asia 50

Acknowledgments 52

Chapter 4: Transforming Government–Linked

Companies through Mergers and Acquisitions 53

The Role of the Public Sector in Key Asian Economies 54

M&A: A Tool That Makes Both Companies and Economies More Competitive 56

The Emerging Threat from the Private Sector 59

Meeting the Challenges 60

A Better Way to Achieve Transformation 67

Acknowledgments 68

Chapter 5: Getting It Right Before You Begin 69

Step 1: A Framework Helps Forward Planning 71

Step 2: Methodical Tracking and Screening Underpin Successful M&A 75

Step 3: Choose Your Model: Classic M&A versus the Acquisition Factory 76

Step 4: Surround Yourself with Experts 83

Plan Early, Think Small: The Risk–Averse Route to Success 86

Acknowledgments 87

Chapter 6: Due Diligence 89

Risk Is on the Rise 90

Follow the Leaders, Learn from the Failures 91

Bridging the Due Diligence Gap 92

Due Diligence: The Classic Approach 94

Operations Due Diligence 95

The 100–Day Plan: A Road Map to Success 101

Jump–Starting the Clean Room 104

Acknowledgments 106

Chapter 7: A Guide to Successful Post–Merger Integration 107

Merger Integration Overview: The Key Pillars of a Solid Post–Merger Plan 109

Merger Management: The Keys to Success 116

Synergy Value Capture: How to Get It Right 122

Merger Enablement: The Glue That Holds It All Together 127

Acknowledgments 135

Chapter 8: Culture Matters 137

It s Not a Small World, After All 138

National Culture and Communication: What the Interpreter Won t Tell You 142

Corporate Culture Matters: Making Mixed Marriages Work 145

Expect the Unexpected: Local Business Culture and Norms Can Be Costly and Surprising 147

How to Bridge the Culture Gap 148

It s Not as Hard as It Seems 159

Acknowledgments 160

Chapter 9: Conclusion 161

Now Is the Time to Go on the Offensive 162

M&A the Asian Way 162

The Key to Success: Planning Ahead 164

Think Globally, Act Globally 165

Appendix: PMI Tools 167

Prepare for and Execute a Perfect Day One 167

Launch Integration Structure and Project Teams 169

Launch Benefits Tracking and Reporting (BTR) Process 173

Launch Risk Management Process 178

Launch Change Management and Communications Processes 181

Notes 189

About the Authors 195

Index 197

Vikram Chakravarty is a Partner with A.T. Kearney′s Singapore office and heads the strategy and corporate finance practice in Asia. He has more than fifteen years of consulting experience and has advised leading corporations across the world in strategy and competitiveness issues. Vikram has led or been involved in more than sixty projects in private equity, commodities, energy, industrials, consumer products, logistics, and financial industries. Prior to A.T. Kearney, he was the Asia Pacific head of strategy for Stern Stewart and, prior to that, Monitor′s regional director of strategy and competitiveness.

Chua Soon Ghee is a Partner with A.T. Kearney′s Singapore office and a core practitioner in both the firm′s strategy practice and its communications, media, and high–tech practice. He has more than fourteen years of consulting and industry experience working with clients across Asia, with a primary focus on helping global and Asian corporations develop successful growth strategies and offering advice on how to operate more efficient organizations. Soon Ghee also has deep industry experience in auto– motive, transportation and logistics, and agriculture.