Case Three Clause Samples

Case Three. The SOE (hereinafter referred to as ‘Company N’) was established in 1965 and employed 410 staff before the acquisition. Company N chose an overseas company as the acquirer mainly because of six reasons: abundant capital, advanced technologies, up-to-date sales and service systems, sound reputation, extending their Chinese market share, and long-term co-operation with the acquirer. Besides those reasons, the board of directors of Company N wanted to sell the company in 2004 due to managerial conflicts between the board members over the solution to the bottle-neck effect of technology. As Company N and the acquirer had co-operated for a long time, Company N finally chose them. (1) Market share. The acquirer would spend a long time expanding the Chinese market without acquisitions. (2) Workers and skilled workers. The acquirer planned to build a factory in Beijing and they had bought a piece of land. However, considering that it would take at least three years to train workers if they established a factory by themselves, they eventually chose to acquire Company N to save time. (3) Company N is a skilled training base, which has cultivated a lot of experts. The quality of these experts and trainees are the best in the local city.