Homework remains the key to overseas M&A success

As China's regulatory environment on overseas transactions gets tighter, domestic companies buying up assets overseas should adopt a more prudent and rational outlook, experts say.

"Companies hungry for overseas deals should take in 'vitamins' rather than 'antibiotics'. This means doing their homework at the very start to nip any potential problems in the bud, instead of looking for a remedy when they encounter obstacles," said Wu Jianyong, a Beijing-based partner at accounting firm Grant Thornton.

Failed deals, Wu pointed out, usually result from a lack of due diligence and overall planning. There is no shortage of domestic investors, mainly private firms, putting in a bid without conducting any due diligence or the slightest idea of how to make the target company synergize with the bidder itself after the transaction.