Understanding Stakeholder Perception Critical in Outbound Investment

On June 11, Jane Zhang chaired a panel discussion at AmCham China’s Outbound Investment Forum on the prospects of Chinese investment to the US.

With increasing resistance and challenges toward Chinese companies’ outbound investment in the US and other markets, Jane said, conducting comprehensive, systematic and in-depth stakeholder perception analysis before making the transaction and during post-transaction operation has become more critical for Chinese companies.

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Jane shared her insight on how to do identify key stakeholders and conduct stakeholder perception assessment at different stages of a global M&A transaction, from the time when the buyer considers the deal, to initial confidential negotiation, and all the way through the execution stage. “Such practices have been applied and proved effective in various global No.1 merging with global No.2 type of transactions,” Jane stressed, “but the systematic approach has not been comprehensively adopted by the Chinese investment community.”

With the increasing challenges towards Chinese outbound investments, Chinese companies need to go deep in analyzing the political and regulatory environment in the target market, understanding perceptions of key stakeholders and figuring out what would move them, so as to mitigate risks and increase the probability of success.