BVI Business Companies (BCs) have been synonymous with offshore vehicles for many Asian and Chinese investors since the 1980s. The volume of incorporations of BCs from the Asia-Pacific region has underpinned the growth of the BVI as a corporate domicile. This consistency in incorporations is exemplified by the profile of existing BVI companies represented on stock exchanges around the world. BVI provides those companies with critical access to capital required to fund acquisitions.

Because BCs operate efficiently and with a high level of corporate flexibility, BCs are frequently used to structure transactions. For example, a BVI company can merge with one or more BVI or foreign companies, and the surviving company of the merger can be the company incorporated in a foreign jurisdiction. This provides great flexibility for structuring mergers & acquisitions (M&As), and cross-border deals.

The BRICS economies of Brazil, Russia, India, China and South Africa continue to strongly support BVI M&A activity. In China, the substantial balance sheets of Chinese state-owned banks, such as China Development Bank and Bank of China, have been driving M&A activity in China, and Chinese lenders are expected to continue to play a key role in driving M&A financing activity in Asia.

The flexible merger scheme in the BVI has been successfully utilized for a number of transactions for companies in the Asia-Pacific region.

M&A Case Studies

The large number of active BVI companies utilized across multiple jurisdictions and diverse industries demonstrate the considerable amount of M&A work involving BVI companies for transaction structuring. Contemporary cases exemplify the BVI’s leadership in the M&A field.  

  • Bison Capital Acquisition Corp., a BVI company listed on NASDAQ, closed a merger deal with Xynomic Pharmaceuticals, Inc., a US-Chinese clinical stage innovative oncology drug development company at a consideration value of approximately US$ 350 million in May 2019. This transaction was particularly innovative featuring numerous elements, inclusive of a re-domiciliation and statutory merger, adding to the overall complexity of the merger.
  • In early 2019, DXC Technology, the world’s leading independent end-to-end IT services company, successfully acquired Luxoft Holding, a global digital strategy and software engineering firm incorporated in the BVI by way of statutory merger. At US$2 billion, the case set a new BVI record for the largest ever takeover of a publicly-listed BVI company by transaction value.
  • Taoping Inc., the BVI-based company formerly known as China Information Technology, Inc. focusing on providing internet-based advertisement distribution and display terminal sharing systems in China, announced in November 2018 a non-brokered private placement of US$1.5 million that will be used to support the global market expansion of Taoping.
  • In January 2018, Sparton Resources Inc. acquired 70% interest in the Yao Wan vanadium project in Shaanxi Province of China of VStar Industries Inc. incorporated in the BVI and Warwick Mining Development Company Ltd. (WMD), a local Chinese private company. The BVI company will take responsibility for all advanced exploration and evaluation expenditures up to the point of a China compliant feasibility study.
  • Justice Holdings Ltd, a BVI special purpose acquisition company, listed on the London Stock Exchange, reached a deal with 3G Capital—principal shareholder of Burger King Worldwide Holdings, Inc., the world’s second largest fast food hamburger restaurant chain, receiving approximately US$1.4 billion in cash.