As mergers and acquisitions in Chinese enterprises are becoming increasingly complex, conducting satisfactory due diligence can increase the chance of successful mergers and acquisition integration.

This paper sought to provide a broader understanding of due diligence that foreign-invested enterprises need to be attentive to when pursuing M&A deals, either with or of Chinese state-owned enterprises (SOE). The various stages of an M&A were described and suggestions for conducting a due diligence process are presented. A HR due diligence guideline is framed, inter alia, from experience on a potential acquisition of a business group of a European invested enterprise by a state-owned Chinese conglomerate. The paper concludes with insights on HR due diligence by focusing on uncovering potential liabilities and unseen employment costs in the context of Chinese culture.
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