PR often crucial step in foreign M&A deals

Educating officials, public can mean difference between success, failure

Chinese companies are seeking mergers and acquisitions in virtually every corner of the world. Their successes—and a few high-profile failures, especially in developed economies—highlight the importance of public relations.

Executives of large Chinese companies, while having the wind at their backs in the domestic market, have struggled to win the hearts and minds of stakeholders abroad in environments where they are often out of their depth.

Jamie Moeller, who directs Ogilvy Public Relations' global public affairs practice, said the PR job can be as simple as it can be complicated. In the United States, where he has the most expertise, the basic principles can be summed up in a few sentences, but it is not always easy to put those principles into practice.

The environment in the US can be described relatively simply. First and foremost, policymakers there care about how transactions will affect local constituencies. Can jobs be kept or created? Is the deal good for the community and the local economy?

PR executives' role is to "communicate and educate" stakeholders about the benefits of a deal. Rational legislators and members of the public will not stand in the way if a transaction genuinely benefits them.

"It is important to be very factual, very transparent. Work with local partners, employees and the general public," Moeller said.

But Chinese businesses often find that things are not as straightforward as they may seem, and some conclude that the US is biased against Chinese investors.

For example, despite years of PR work, US regulators have still limited Huawei Technologies Co Ltd's access to the US market, citing "national security concerns".

Moeller said: "Sometimes perception lags reality. Sometimes perception among policymakers and influential parties gets set very early on, and it takes a while to educate people and change those perceptions.

"But I think it is important to continue to communicate, continue to tell the story, continue to be very factual and transparent."

How long does such a process take?

"It is very hard to say. The more effort you put into communicating, the less time it takes. That's an equation: more communication equals faster transformation," he said, laughing.

Then there is the Committee on Foreign Investment in the United States, an unavoidable name when talking about investing in the US.

It blocked Huawei's access one year ago, but just the other day, it approved the Lenovo Group Ltd's acquisition of IBM Corp's low-end server unit, adding more confusion over how the agency reviews and makes decisions.

In Moeller's eyes, there is nothing unusual going on. The key to dealing with the CFIUS, he said, is "to educate, explain and provide as many facts as possible".

Overseas M&A deals on the rise	Outbound M&A activity on the rise, survey says