30 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 SEPTEMBER 2024 2024 ALB CHINA M&A RANKINGS RISING EXPECTATIONS The current market environment demands caution from all parties involved in M&A transactions, directly impacting lawyers’ work. Du has observed several new trends in clients’ expectations regarding M&A timelines, due diligence, and terms arrangements. Firstly, “Clients are now more urgent about M&A timelines. This urgency likely stems from their desire to seize market opportunities quickly, reflecting a heightened emphasis on rapidly responding to market changes,” Du notes. Regarding due diligence, “Clients have become less tolerant of risks and demand more thorough investigations, particularly concerning company debt scrutiny. This is primarily driven by the need for better risk management in M&A, as clients aim to mitigate risks and ensure the reasonableness of their decisions through more in-depth due diligence.” In terms arrangements, Du has observed that “as the M&A market matures, some clients have abandoned the traditionally popular valuation adjustment mechanism clauses. They now believe they have the capabilities and experience to make informed judgments, preferring more reliable and practical methods to reach consensus on valuations. Clients are moving away from relying on the target company’s optimistic projections and are instead insisting on valuations that reflect the true value of the target, avoiding potential fallout from unmet performance targets.” Jin points out the impact of the new Company Law on M&A, especially on specific terms arrangements. “Changes in regulations, from registered capital and executive responsibilities to the requirements for company founders and even final settlement and liquidation, have all drawn acquirers’ attention. They want to ensure that any historical issues with the target company can be safely addressed post-acquisition.” Additionally, the increasing complexity and specialization of M&A transactions are reflected in clients’ growing demands for intermediaries’ expertise. Jin notes, “Previously, clients expected M&A lawyers to be well-versed in both legal matters and industry specifics. Now, the industry is further segmented; for example, pharmaceutical M&A is divided into areas like small molecule drugs, original drugs, and generic drugs. Understanding the specifics of these products and the related regulatory landscape is becoming a basic requirement for M&A lawyers.” “Looking ahead,” Jin adds, “clients may require lawyers to delve deeper into specific industries, understanding the entire supply chain to assist with comprehensive vertical integration.” While clients are raising their expectations for the quality of M&A services, they are also becoming more sensitive to pricing. Jin admits, “Amid economic pressures, clients are increasingly focused on cost-effectiveness when selecting legal teams.” Du echoes this sentiment, adding, “Clients are generally willing to accept the industry’s standard fee structures and even a slight premium. However, they prefer success-based compensation, where full payment is contingent on the successful completion of the project.” Furthermore, “Clients also expect lawyers to proactively identify potential risks and provide solutions in advance. We’ve noticed that the advice offered by experienced lawyers on risk prevention is becoming increasingly valuable to clients.” FUTURE TRENDS Discussing potential future trends in the M&A market, Wu highlights the Nine New Guidelines for Capital Market Emphasize Strict Regulation, Risk Prevention issued in 2024. “Four of the guidelines specifically address M&A, emphasizing the optimization of M&A processes, improving the efficiency of small-scale reviews for the STAR Market and ChiNext, and fostering a fairer and more efficient M&A environment. In the future, ‘small but beautiful’ M&A deals may become a highlight,” says Wu. Moreover, influenced by policy guidance, Wu anticipates that “industry M&As driven by tech companies will surge, and in the context of ‘new quality productive forces’ and the latest round 2024 ALB China并购排名的 调研期间为2023年5月至2024年5 月，与往年相同，排名依旧分为一、二、 三，及值得关注律所四类，共有45家 律师事务所上榜。 这其中，8家是今年的新上榜律 所，还有3家律所实现了类别提升： 这意味着，即便调研期间的中国并购 市场挑战重重，但不断重塑的市场也 给新的参与者提供了机会，能够“读 懂”市场的人，正在变局中探索着“弯 道超车”。 上榜律所的并购服务团队中，有 的规模庞大，总人数达到150人以上， 他们着重探索着自身在生态圈、全局 性、性价比层面的优势；有的则较为 精练，拥有十数名合伙人及不到50人 的业务团队，他们则持续深化自己在 特定产业领域的纵深优势。 如果说持续到2021年的火爆交 易市场为大、中、小不同规模的并购法 律服务团队都提供了业务机会，当下 的并购市场已绝不再是相同的逻辑： 法律团队必须清楚自身优势是什么， 并找到恰当的手段不断放大优势。只 有定位精准，才能牵引业务持续发展。 仍有服务机会 汇业律师事务所高级合伙人吴冬律 师对ALB坦言，2023年疫情结束后， 律所的并购业务呈现出上升趋势，但 尚未恢复至疫情前的交易数量峰值。 不过较为沉寂的市场中也有亮 点。吴律师观察到，“由于目前IPO上 市通道受阻，更多的投资方及私募基 of SOE reforms, the industrial M&As led by tech-centric SOEs might elevate the M&A market to new heights.” This trend is strongly felt by the Tiantai team. Over the past year, they have assisted clients in high-tech sectors such as aerospace, biotech, and robotics with various M&A transactions. Gao notes that the high-tech sector has been less affected by the economic downturn. Additionally, the government’s policy of supporting relevant businesses through a multi-tiered capital market and enhancing production and R&D capabilities has encouraged companies to expand and develop their technological influence through M&A.
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