China is a major economic force in the world and that financial power is expanding at a rapid rate. When Chinese based e-commerce leader Baozun recently acquired GAP Greater China this November, it was not only big news in China, it resonated around the globe. Julie Comer, a mergers & acquisition expert and financial analyst specializing in complex cross-border growth strategy development, was at the heart of this event. She explains, “I worked with Baozun’s president of Brand Management to analyze the current GAP Greater China fleet and build up a Business Plan over the next ten years for GAP Greater China to ensure the deal’s feasibility was meeting Baozun’s investment criteria.” Julie facilitated the due diligence process between Morgan Stanley, GAP’s financial advisor, and different financial and legal advisors on the Baozun side. Her presence and insight in meeting between the legal & financial representation of both parties led to the negotiation of the agreements which closed this immense deal.
GAP is the largest American company of its kind. Utilizing digital capabilities/channels with physical stores to enhance the public’s shopping experience is a prominent part of the company’s preeminent position in the marketplace. As the leading Chinese brand e-commerce solution provider and digital commerce enabler in China, Baozun holds dear concepts mirroring those of GAP. Baozun’s all-cash transaction (at an estimated $40 million) in obtaining GAP Greater China appears to be not only one of the largest deals of its kind but also one of the most mutually beneficial. History was vital in multiple ways in facilitating this acquisition. Baozun had negociated with Ms. Comer and her company Lazare Consulting LLC to acquire the company Full Jet while at the same time Baozun had served as Greater GAP China’s e-commerce service partner as far back as 2018. Still, this doesn’t guarantee an easy process or a successful acquisition as Julie defines, “Even if GAP and Baozun already worked together, these two companies come from different sectors: GAP is brands oriented and Baozun is more operational. During the negotiation, it was vital always to ensure both parties felt comfortable with the conditions or to find a middle ground that respected both key principles (brand reputation for GAP, for example).” One sizable challenge was that GAP Greater China’s leadership was based within the country while the GAP corporate team was US based in large part on the West Coast. Additionally, COVID protocols and safety measures further inhibited travel and in person meetings. Only days old, this deal has yet to reveal its full value but so far it seems to be one of the biggest deals of recent years for China and Baozun. As someone with the perspective to make an insightful assessment, Julie Comer confirms, “The negotiations were always done having in mind a long-term partnership and the keeping in mind the uniqueness and complexity of the Chinese market. I think these two factors are good signs for the future success of the acquisitions. The fact that we convinced an international brand that a Chinese team was in the best position to implement a China-for-China strategy and grow their brand, is a great reward.”
Published by Pooja Agarwal