Source: Medical Device Innovation Network

Now, in the context of global economic integration, international business development and growth has become inevitable. Overseas mergers and acquisitions to become one of the important ways to win this global "war".

China's medical equipment business in recent years has entered a fast track of development, domestic brands has grown in the country through a series of mergers and consolidation after, probably starting in 2008, China's Yi Xie industry has begun to enter the international market, mergers and acquisitions, followed in 2012 the second half, the domestic medical equipment companies seek to enter the international market, set off the first wave of overseas mergers and acquisitions industry Yixie climax.

The status of domestic enterprises overseas M & A 1. Yixie

Ten Chinese overseas M & A case of medical devices:

1, May 2008, Mindray Medical $ 202 million acquisition of US company Datascope

2, December 2010, Nathon Medical Group acquired the Finnish company Inion

3, 2011, China Resources Medical $ 100 million acquisition of US company Aurora

4, April 2011, Neusoft Group $ 1,777,000 to acquire 30.77% stake in Israeli company Aerotel

5, November 2011, acquisition of Dutch medical Dunlop Comed company

6, Jinjiang Electronic company 80 million yuan to buy US Cardima

7, Fosun $ 240 million to acquire 95.6% stake in Israeli company AlmaLasers

8, June 2013, Mindray Medical $ 105 million acquisition of US company Zonare

9, June 2013, $ 290 million acquisition of minimally invasive medical company US WrightMedical

10, September 2013, Mindray Medical to acquire Australian distributor Ulco Medical Co., Ltd.

From the beginning of the second half of 2012, China's medical equipment business continues to expand overseas M & A, the amount also hit record highs, and the trend there is still much room for development. Ten cases from above can be said to be a microcosm of the past few years, China's medical device companies overseas mergers and acquisitions, reflecting the domestic medical equipment industry enterprises sought international, diversified, out of the country, to the world a strong signal.

Yixie domestic enterprises to go abroad, overseas mergers and acquisitions, and mergers and acquisitions climax occurs, which it is dependent on many reasons. From the domestic situation, China's medical equipment industry, many enterprises, covering most of the direction, especially in the fierce competition in the saturated low-end chain; and relatively liberal policy of overseas mergers and acquisitions, as well as ample cash reserves the rise of China's private enterprises to make a large number of domestic companies interested in learning techniques and experience abroad, as well as global expansion. From a global perspective, China's rising international influence so many sellers realize the importance of cooperation developed with Chinese enterprises. In addition, the international wave of financial crisis and global economic downturn slump but also to Chinese companies overseas M & A opportunities.

2. Trends in overseas mergers and acquisitions of domestic enterprises Yixie
At present, the domestic medical device companies overseas mergers and acquisitions in a rising period, merger cases continues to grow, the amount of mergers and acquisitions has continued to rise. However, domestic enterprises in overseas mergers and acquisitions Yixie in post-merger integration, especially international management experience and deal with cultural differences, is currently facing a problem. According to research and analysis, the waves caused by cultural differences, so that some domestic enterprises in overseas mergers and acquisitions Yixie hesitant; the implementation of merger integration of business many decided that its integration is difficult to achieve the desired effect.

Now, with the growing strength of China's economy, the gradual recovery of the world economy and the national top-level strategy design and international mergers and acquisitions continue to introduce favorable policies, the future of China's medical device companies will face a new situation and changes in overseas mergers and acquisitions, it will also inevitably reflect the new trend.

Trend: stimulating the development strategy of the top overseas acquisitions

This year, China has gradually released the top national development strategies, "along the way" gradual improvement "Asian investment bank," the preparation, have greatly stimulated the enthusiasm of Chinese enterprises overseas mergers and acquisitions, large-scale private enterprises to actively assist overseas layout and overseas mergers and acquisitions, especially in the rapid upswing in the domestic medical device companies.

"Along the way" will connect Asia, Africa and Europe continent continental island, and the "Asian investment bank" has even more tightly link up in most economies. Yixie domestic industry can take advantage of these two strategies to bring the dividend policy and economic and trade exchanges and mutual trust and understanding and so on, in terms of policy and communication as well as cultural aspects, both for domestic enterprises overseas mergers and acquisitions Yixie pave the way to develop the international market.

At present, the State Council Development and Reform Commission, Ministry of Commerce and Administration of Foreign Exchange issued the relevant policies are respectively, simplifying the management of foreign exchange overseas acquisitions, a substantial relaxation of government approval authority overseas acquisitions. This means that the domestic medical device companies overseas mergers and acquisitions will usher in yet another climax.

Trends: change the purpose of overseas mergers and acquisitions

With the deepening of the process of internationalization of Chinese enterprises overseas acquisitions by trying to seek new profit growth point, conquer new markets and become a leader in global competition.

At present, the domestic medical device companies through overseas acquisitions not only want to achieve new profit growth point and explore new markets, but also hopes to raise more overseas acquisitions to achieve the replacement level of technology and management. Over the past few years through mergers and acquisitions, domestic medical device companies to gradually catch up with the technical and even become the world's best, while at the management level has made great progress. The next step is to seize the trend industry market segments, and further deepen globalization.

Thus the domestic medical equipment companies in overseas acquisitions will reflect a new trend: increased mergers and acquisitions industry segments, spread of globalization layout.

3. Challenges enterprises overseas mergers and acquisitions of domestic Yixie

The current complex international situation, overseas mergers and acquisitions there is some uncertainty. In addition, because of differences in organization, management level; cultural differences and deal with different things, etc. due to factors brought on is the problem of post-merger integration. Standing on the new historical starting point, Yixie domestic enterprises overseas mergers and acquisitions will face more severe challenges.

BCG for China's overseas acquisitions over the past decade and the future development trend of overseas acquisitions carried out research and analysis, sort out the major challenges of Chinese enterprises in overseas mergers and acquisitions often encountered these challenges embodied in the acquisition strategy development, due diligence and acquisition and integration of three stages. Naturally, this is currently the domestic Yixie new challenges facing enterprises in overseas mergers and acquisitions.

Challenge one: M & A strategy is unclear

BCG survey found that many companies lack a clear roadmap for acquisitions, mergers and acquisitions vague purpose, or lack of understanding of the synergistic effect.

For example, some companies eager to become bigger and stronger, have not been adequately prepared to blindly into the unfamiliar field of overseas mergers and acquisitions; some companies do not have clear and workable roadmap for overseas acquisitions to its "going out" strategy to provide support. On the other hand, the lack of adequate international resources and expertise, over-reliance on investment banks and other intermediaries to provide information about the target company, but also Chinese enterprises since the search and selection difficulties when acquisition targets.

Mindray we can through the success stories to illustrate a clear acquisition strategy as well as a deep understanding of the subject and a comprehensive assessment of the domestic factors Yixie companies achieve overseas acquisitions indispensable.

Mindray also successfully achieved through overseas acquisitions international dream. Mindray since 2000 has been pursuing an international strategy, the 2008 acquisition of US medical equipment suppliers Datascope's life care business, becoming one of the world's top three in the field, in the multitude of strong North American healthcare market place occupy valuable, its internationalization process to achieve substantial breakthroughs. 2013 Mindray cost $ 105 million acquisition of US manufacturer of ultrasound diagnostic systems Zonare Medical Systems, Inc., to further consolidate and improve the global business layout.

Thus, we can see that it is precisely because there is a clear goal and a clear line of acquisitions in order to achieve flame in the growth of private enterprise in the capital.

Challenge: lack of due diligence expertise

Lack of international experience, the legal environment for foreign business and profit model is not deep understanding, the ability to organize and coordinate the business, legal, finance, human resources, the lack of internal and external resources, the ability of due diligence risk assessment and decision points is insufficient, these are It is a common problem of Chinese enterprises overseas M & A due diligence during encounter.

Some companies on the economic and social environment in which the region is poorly understood subject acquisition, and because differences in language, culture and philosophy, and professional guidance to the business, financial and legal advisers recruited locally sometimes not be believed, or can not be delivered on time The key decisions to parties. On the other hand, enterprises in the internal decision-making power of many highly concentrated in the rear, living in the forefront of the best team empowerment tune insufficient, leading to internal and external resources coordination and communication difficulties, try adjusting process is slow inefficient. In addition, many enterprises in the lack of due diligence expertise, to make the transfer process and are not familiar with international practice, making it impossible to correctly identify the key risk points.

Challenge III: post-merger integration difficulties

East-West has a great cultural differences and deal with the problem the way customary practices. Chinese enterprises in the post-merger integration, since there are differences in the management level, in dealing with issues different ideas, different cultures in the customary practices, and clear understanding of the local business structure model and bring the laws and regulations , Most is one of "two systems", after overseas mergers and acquisitions is still using its original management mode even on the integration of the original cast, which would place undue reliance on the original target enterprise personnel on the integration of only a rough outline of the top design, not specifically to the details, the final change emerged acquisition effect is poor.

Post-merger integration problems, a serious impediment to more domestic medical device companies overseas acquisitions.

In addition, since the changing global situation, overseas mergers and acquisitions there is a considerable uncertainty. In some countries there is a certain anti-Chinese psychology, or the existence of unstable regimes, have for overseas acquisitions has posed a serious challenge.

4. Recommendations enterprises overseas mergers and acquisitions of domestic Yixie

Challenges for the three stages of domestic enterprises overseas mergers and acquisitions Yixie exist, our advice is:

First, select the destination according to their development needs, formulate detailed plans, set up well clear road. Yixie domestic enterprises should be based on the company's own vision and strategy, combined with the industry trend analysis, determine priority areas for the development of its overseas acquisitions, to develop a clear strategy of overseas acquisitions.

To understand the development of the industry, mergers and acquisitions in the selection of priority areas, to pay attention to their own enterprises overseas mergers and acquisitions aim is to improve the areas of outstanding complement their own businesses, or to the layout of their own advantages products in overseas markets. What is also needed is adequacy, completeness and accuracy of the preliminary investigation.

Secondly, after the decision, during the implementation phase to be efficiently implemented. Yixie domestic enterprises overseas mergers and acquisitions in order to go out, we need to have a professional talent, especially in the negotiations, as well as risk control and on-site review of the implementation of other aspects require professional and efficient execution, you need to have specialized personnel, complete and clear processes also need to have full and complete coordination of emergency plans.

Enterprises should focus on synergy assessment, integrated unified concept of post-merger plans, etc., established overseas reasonable control architecture including financial, strategic, operational, etc., and the decision-making process, through internal training and external introduction to reserve cross-cultural management personnel. In addition, we also need flexible communication mechanism.

Finally, to improve their skills. To make acquisitions, especially overseas mergers and acquisitions to become a powerful engine of the company's development, companies need to develop and enhance relevant overseas acquisitions strategy, organization, processes and controls and a series of core competencies.

Broadly speaking there is need to focus on four areas: overseas mergers and acquisitions need to develop strategic planning capabilities; to reserve high-end international management talent; to be more professional in the M & A process and management; to establish clear performance appraisal system.

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