Chinese FMCG Characteristics Of Transnational Merger

With the rapid development of economy and the advantageous macro policy, China’sfast moving consumer goods industry develops fast. After adopting reform and open-doorpolicy, foreign direct investment in China has increased in a fairly high speed. Somewell-known national brands such as Dabao, Huiyuan and Wahaha are successively mergedby foreign corporations and foreign brands are in the dominant position in the market.Since the12th five-year plan, the government encourages even more mergers to integrateadvantage resources in the industry and improve the competitiveness of industries. Underthe pressure of foreign brand’s advantages and intensive competition of domestic market, Afew large FMCG companies (such as Bright, Cofco, Yili) began to develop overseas. Theauthor thinks that the domestic FMCG industry is still in the initial stage of transnationalM&A, with the advancement of the domestic market integration, cross-border M&A willbecome a major means of seeking development. In this paper, the author describes theFMCG concept and relevant categories, development environment and current situations.Furthermore, the author selects BRIGHT series deal as the breakthrough point to analysesthe general characteristics of transnational M&A in FMCG industry, and summarizes upthe guidance and rules for cross-border M&A activities to provide some reference forFMCG corporates.