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Selected Case

published: 26 Sep 2016

  • Topic: Strategy
  • Industry: Real Estate
  • Region: Asia

Abstract:
The case illustrates a wide range of strategic and implementation issues that companies face in mergers and acquisitions (M&A), particularly in an emerging market such as China. The three-part case is about Sunac, a real estate company listed on Hong Kong Stock Exchange (HKSE), and its various attempts to expand by acquiring other real estate businesses in China. Case (A) describes the overall industry environment, value chain, and analyses of Sunac (the acquirer) and Greentown (the target). It explains the macroeconomic background and the details of proposed transaction in May 2014. Case (B) reveals what happened after Sunac had paid HKD6.3 billion for Greentown. Case (C) describes two further acquisition attempts by Sunac in 2015 – of Kaisa and Yurun.

Pedagogical Objectives:
The case can be used to explore any or all of the following topics: 1. Competitive strategy (industry analysis, competitive analysis) 2. Mergers and acquisitions (strategic and financial rationale vs. implementation challenges) 3. Strategy in emerging markets, particularly in China (the trade-off between brotherhood or network-based and arms-length transactions) 4. Corporate governance (founder CEO’s power, board restructuring in M&As)

Keywords:
Mergers & Acquisitions, Real Estate/property, China and Emerging Markets, Industry Analysis, Competitive Analysis, Synergy, M&a Process and Implementation, Brotherhood or Network-Based Vs. Arms-Length Transactions

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