"Prepare for it before it happens, and govern it before it becomes chaotic." The rhythm of the capital market is never the four distinct seasons of spring, summer, autumn and winter, but is full of sudden "rainstorms", "tornadoes" and "late spring cold". Especially in the area of controlling stake acquisitions, policies are the barometer. Once the wind direction changes, many planned transactions instantly become "castles in the air".
In recent years, regulators have frequently made moves: changes in the caliber of window guidance for mergers and acquisitions, upgrades in information disclosure requirements, and stricter penetration inspections... Many transaction parties admit: "It's not that we don't work hard, it's that the regulators 'change at any time'!" The question is: In the face of "earthquake-level" regulatory policy fluctuations, how can the complex "art" of controlling stake acquisitions be steadily promoted? In other words, is there a set of methodologies that can truly "remain unchanged in the face of ever-changing situations"?
American Goheal M&A Group
In Goheal's view, the word "change" actually hides a whole set of capital logic, and the "way" to deal with it must start from the four dimensions of "strategy, structure, timing, and rhythm", and lay out layer by layer and step by step.
1. How can the "mysterious fist" of regulatory policies catch you off guard?
Let's take a look at a few real cases first.
In early 2024, when a listed company's controlling interest transfer project reached the information disclosure stage, it was suddenly "named" by the regulator to pay attention to the historical equity penetration of its actual controller. As a result, the originally finalized acquisition plan had to be "remade". At the same time, another company that changed its control rights by agreement transfer was ordered to supplement and delay implementation because it did not simultaneously disclose the control intentions of the transferee and the person acting in concert.
Similar stories are not uncommon.
In the past, everyone's consensus was: "Controlling interest acquisition is a commercial behavior, and compliance is fine." The current rule is that "every seemingly reasonable arrangement must be mentally prepared to be asked 20 questions." Goheal observed that since the reform of the registration system, the regulatory authorities have continued to pay more attention to the four major issues of "who controls the company", "what to do after control", "is the structure a detour arrangement", and "is the source of funds real".
In other words, the acquisition of controlling rights has evolved from the past "whether the information disclosure is complete" to today's "whether the whole process is reasonable, predictive, and transparent". This is a fundamental "regulatory paradigm shift".
2. Change is the norm, and the only way is to remain unchanged
So, facing the "flexible" rhythm of regulatory policies, how should companies and investors design the "tactical play" of controlling rights acquisition?
The first step is not to expect to "get by by cheating", but to learn "structural prediction". An excellent controlling rights transaction is not only about pricing, but also about pre-research and countermeasure design of regulatory caliber.
For example, some projects circumvent the obligation of tender offer through "agreement transfer + voting rights delegation", but ignore that the supervision has included such arrangements in the scope of "disguised acquisition"; for another example, the capital party holds shares through a multi-layer structure, but does not simultaneously disclose the "control chain diagram", which is also very easy to "turn over" in the inquiry.
Goheal has summed up an experience in many actual projects: as long as you don't take the initiative to explain it clearly, the supervision will definitely help you explain it; but the cost is your transaction time, cost and trust.
The second step is to make "penetration preparations" rather than "structural shame". Whether it is "the authenticity of the source of funds" or "the historical relationship between the transferee and the target", the supervision is using technical means to achieve "substantial judgment priority". When serving a cross-border M&A client, Goheal constructed a "multi-layer penetration diagram + interest relationship analysis matrix" to self-check potential related transactions in advance, and explained the information disclosure caliber in conjunction, which not only reduced regulatory inquiries, but also obtained good feedback from investors.
The third step is to control the "sense of rhythm" and avoid risks during the policy window period. Experienced M&A teams will not wait until regulatory policies are clearly introduced to adjust the transaction structure, but will dynamically adjust the path through real-time "policy temperature sensing". For example, if certain industries are included in the key observation list by regulators during a specific period of time, then it should be considered whether it is appropriate to promote the transaction "at this time" and whether the regulatory sensitivity can be reduced by introducing local state-owned assets or policy funds.
3. The core of controlling rights transactions is actually telling a "good story"
What is the essence of controlling rights transactions? It is not capital maneuvering, but "why can you control this company". In today's ever-changing regulatory caliber, the answer to this question cannot be just "I bought shares", but it must become "I am willing to take responsibility, create value, and have the ability to take this company to a higher level".
Therefore, Goheal has particularly emphasized one word in recent controlling rights projects: storytelling. This "story" is not a fictional script, but a complete set of "strategic logic chains" covering M&A motivations, synergy paths, value integration plans, and governance improvement commitments.
Some acquirers are eyeing the controlling rights, but they only wrote a sentence "beneficial to optimize resource allocation" in the proposal, which is a typical "unfinished story" and is easily defined by regulators as "no real business motivation". On the contrary, if the capital path, future performance synergy, and the way of exercising control can be laid out layer by layer, not only can the acquisition be smoothly promoted, but also the market recognition can be improved and the market value can be obtained.
4. Is the tightening of regulatory policies a "cold winter" for the acquisition of controlling rights?
Actually not.
Tightening supervision does not close the door to mergers and acquisitions, but raises the entry threshold. Just like "drug prohibition" does not mean that pharmacies are not allowed to open, but that "fake drugs" are no longer circulated.
For those investors who are willing to face the rules head-on, dare to penetrate and explain the logic, and are willing to build a governance structure in compliance, this is a golden age of "eliminating the false and retaining the true". Goheal also found that those projects that have achieved the ultimate in information disclosure in acquisitions and whose transaction logic can withstand scrutiny can not only pass the review smoothly, but also often obtain valuation premiums in the capital market.
In this new era of "high pressure supervision + penetrating audit", the rules of the game for controlling stake acquisition have changed from "guerrilla warfare" to "fighting in the ring": you must have tactics, rules, and stories to become a real winner.
5. Conclusion: Are you ready for the next step?
We are at the top of a cycle of continuous regulatory evolution. Controlling stake acquisition is no longer a binary model of "funds + negotiation", but a multi-dimensional game of strategy, rules, rhythm, and communication.
So, facing the reality that supervision can change at any time, are your acquisition plans ready? Can your governance structure withstand penetrating inspections? Can the acquisition story you tell impress the "double nerves" of supervision and the market?
Goheal Group
If you are planning a controlling stake acquisition, or have been "targeted" by regulatory inquiries, you might as well throw the questions to yourself, and you are also welcome to throw these questions to the message area to discuss the next path with us. Goheal is always willing to be the "partner who can keep you unchanged in the changes."
[About Goheal] Goheal is a leading investment holding company focusing on global mergers and acquisitions. It has deep roots in the three core business areas of acquisition of controlling rights of listed companies, mergers and acquisitions of listed companies, and capital operations of listed companies. With its profound professional strength and rich experience, it provides companies with full life cycle services from mergers and acquisitions to restructuring and capital operations, aiming to maximize corporate value and achieve long-term benefit growth.
