Page 10 - SONEPAR 2021 - AcquisitionBook

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1.5 ENTER NEW COUNTRIES
The GROUP CEO will define the new countries where the GROUP may want to expand. Entering a new country must be approved by the SONEPAR Corporate Board.
The following guidelines shall be considered before entering a new country:
➜ political, economic, tax and legal stability of the country are key criteria;
➜ market size matters and must be analyzed on a case- by-case basis;
➜ the objective is to reach a number 1 or 2 position in a relatively short time, i.e. within 3 to 5 years;
➜ the entry into a new country shall be done with a strong company;
➜ solid management is always a key point in acquisitions, but it is even more essential in new countries;
➜ any significant risk identified regarding people security or business ethics (e.g. corruption, antitrust or economic sanctions) will be a no-go criterion.
PHASE 1: STRATEGIC ANALYSIS
Enter new countries
Another significant point to consider is whether our key suppliers are active in the considered country.
The target company in a new country may consider that all future growth will run through it. It must be communicated clearly that no country exclusivity will be given further to this first acquisition.
TO KEEP IN MIND
➜ The M&A process starts with the definition of the Country’s M&A strategy as validated by the GROUP CEO as part of the Impact Plan update.
➜ Any new acquisition opportunity shall fit with the country’s acquisition strategy.
➜ No efforts should be spared to get as much information as possible about the concerned target and market and to regularly
update the list of potential targets.
➜ Entering a new country requires extra attention and prior HQ approvals.
8 SONEPAR - ACQUISITION MANUAL - 2021 - FOR INTERNAL USE ONLY
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