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IP plays an important role in overseas M&A

2016-02-25 国家知识产权局

Intellectual property plays more and more scenes in the plays of Chinese companies’ mergers and acquisitions abroad. In January 2016, Qingdao Haier acquired GE’s home appliances business by 35 billion Yuan. In the same month, Shenzhen Ellassay acquired 65% of Ed Hardy’s stock shares by 240 million Yuan. In February, ChemChina bought out Syngenta by 280 billion Yuan, making a new record of Chinese companies’ overseas M&A.
In recent years, Chinese companies made higher and higher prices in overseas M&A. Research shows that, in 2015, companies in mainland China made a yearly growth of 40% in M&A cases, and a 21% growth of amount in M&A. In these cases, intellectual properties including high-tech patents and brands were main goals for these companies to achieve.
“Since innovation plays an important role in international business competitions, it seems that overseas M&A is a shortcut to gain intellectual properties and broaden market,” says a staff from ChemChina. In 2005, ChemChina bought out Adisseo and obtained its patents, thus steped forward in certain fields.
According to the staff, one of the keys to success in overseas M&A was intellectual property. There are kinds of permitting procedures from relevant countries in overseas M&A, one of them is intellectual property of the acquiring company. By the time of press, ChemChina owns nearly 10,000 patents, and has production or R&D bases in 150 countries and areas. Intellectual properties made contributions to the successful M&As.
“Gaining intellectual properties by M&A helps the acquiring companies save time in R&D, and making progress in short time, which made Chinese companies run smoothly in going abroad,” says Li Shunde, dean of the Law and IP Faculty, the University of Chinese Academy of Sciences.
At the same time, yet some Chinese companies were encumbered by their acquired companies for lacking innovation after overseas M&A. To this issue, Li Shunde points out that, Chinese companies should research unremittingly after getting intellectual properties in overseas M&A to remain competitive.
Based on the ground, more and more Chinese companies keep innovating after overseas M&A and enlarge market to constant development. One good example is Zhejiang Geely. After buying out Volve in 2009, Geely got more patents and used their newer patents to lift Volve’s technique. Some new models like Volve S40, V50 and C70 are all based on utilization of  new patents of Geely.
“Overseas M&A is a double-edged sword for Chinese companies,” says Li Shunde, “Chinese companies should build on themselves in intellectual property after overseas M&A and make M&A a springboard to strive for further improvement.”(by Zhao Jianguo) (编辑:孙雅曼,编校:秦韵,审读:刘珊,美编:曹晨)

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