24 Feb 2020 1 minute read
As coronavirus (Covid-19), first reported in Wuhan in December 2019, spreads across China and beyond, it has been widely reported that some Chinese companies are looking to suspend or terminate their contractual commitments. Factory closures, port and travel restrictions on goods and workers, a decline in energy demand, and reductions in consumer spending are affecting many sectors including manufacturing, transport, tourism, energy and retail.
Current indications are that global M&A activity so far in 2020 is significantly down on the equivalent period last year – uncertainty about the potential impact of the virus may be partly to blame for that – and Chinese inbound and outbound M&A is largely on hold for the time being.
In the wake of the ongoing epidemic, international and Chinese companies are facing a number of difficulties, and many of our clients are asking how they can protect themselves in M&A deals that are currently underway where the target has trading links with (eg significant imports to, exports from, or production sites or operations in) China, particularly those parts of the country that are most severely affected by the virus.
Any such links may not be immediately apparent; they could arise anywhere in the supply chain. In an article on the A&O website you can find some pointers. Please click here to open the article.
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