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Time to start focusing on smooth M&A transitions

By Liu Jie (China Daily)
Updated: 2007-06-26 09:58

"It is also helpful to provide English language training to all senior Chinese managers and their wives," Baker added.

At the employee level, the MNCs will assess productivity and profitability and reduce the number of staff accordingly.

"Begin your skills assessment immediately after the transfer of ownership so that training programs can be implemented as soon as possible for all high-potential staff and others that you want to retain," Baker said, adding that typically around 25 to 30 per cent of staff will need to be removed to meet the MNCs' goals.

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Executives should take measures to strengthen communication between staff of partner enterprises and maintain transparency, in terms of objectives of M&A, shareholding structure and future business orientation, to all employees.

A win-win is always an ideal and expected outcome of M&As, which requires the efforts of the two sides on an equal and fair basis, insiders said.

Wahaha and Danone's conflict is not finished, but it should provide lessons to other business involved in M&As. "No matter the final result, it is already a case from which both Chinese and foreign enterprises can draw numerous lessons on how to cooperate and compete," Tang said.