As the relationship between the US and China has deteriorated, an increasing number of Chinese companies are ending their US-based operations. This can be a difficult type of transaction to pursue.
Derek Liu, Rod Hunter and Howard Wu set out some guidance for companies on what they need to bear in mind as they head down that path:
- In order to execute a smooth exit from US operations, Chinese companies should retain a good US financial adviser
- Careful consideration should also be given to how the asset is packaged, preparing stand-alone audited financial statements, and optimizing the business for post-closing operations
- Chinese companies should be prepared to use US law and engage in longer negotiations as a result
- CFIUS-related requirements and risks should be understood during the early stages of the deal
This article was first published in China Law & Practice.
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