Publications
Publications
- March 2018 (Revised January 2021)
- HBS Case Collection
China Vanke: Battle for Control (A)
By: Lynn S. Paine, Charles C.Y. Wang, Dawn H. Lau and Anthony K. Woo
Abstract
In June 2016, the board of China Vanke, one of China’s largest and best-known private residential real estate developers, must vote on a proposed acquisition that is opposed by its largest shareholders, state-owned China Resources Co. and the lesser-known property developer and financial services company Baoneng. The case describes how Baoneng amassed enough shares in Vanke to become its largest shareholder, displacing China Resources in that position. In response to Baoneng’s unwelcome advance and in support of its “railway plus property” strategy, Vanke’s management has proposed the acquisition of a unit of Shenzhen Metro, the government-owned operator of Shenzhen’s underground subway. The proposed acquisition, to be financed by issuing shares, will make Shenzhen Metro Vanke’s largest shareholder and dilute the holdings of both China Resources and Baoneng. China Resources has publicly expressed misgivings about the transaction and the board’s handling of its announcement. With three out of the 11 board seats occupied by China Resources affiliates, and a two-thirds majority needed for the proposal to pass, the vote would determine the future of Vanke.
Keywords
China Vanke; China Resources; Hostile Takeover; Board Of Directors; Shareholding Structure; Shareholder Rights; Asset Restructuring; Corporate Governance; Governing and Advisory Boards; Valuation; Business and Shareholder Relations; Real Estate Industry; China
Citation
Paine, Lynn S., Charles C.Y. Wang, Dawn H. Lau, and Anthony K. Woo. "China Vanke: Battle for Control (A)." Harvard Business School Case 318-117, March 2018. (Revised January 2021.)