The automotive mobility sector encompasses a long and complex value chain – from raw materials all the way to end-of-life recycling.

• At the upstream end, Tier 3 material suppliers provide basic raw materials (metals, polymers, battery minerals, etc.), and Tier 2 component manufacturers produce parts and sub-assemblies. Next, Tier 1 suppliers deliver major systems (engines, e-motors, transmissions, electronics, software) directly for vehicle assembly.
• In the midstream, automaker OEMs handle the design, manufacturing, and assembly of vehicles.
• Downstream, the value chain extends through distribution networks (importers, dealerships) and after-sales services (maintenance, parts, charging infrastructure, etc.) to the final users. In recent years, new layers have been added – for example, battery gigafactories and software platforms are now critical links, and recycling & circular economy initiatives are emerging to reclaim materials and remanufacture components at end-of-life.

This value chain is not only extensive but also economically vital. The automotive industry remains a key sector in many economies, contributing significantly to manufacturing value-add, employment, innovation, and exports. It is also highly globalized: production and supply networks span continents, and over the past 25 years global output has shifted geographically. Notably, China has emerged as the world’s largest auto producer, accounting for about 32% of global automobile production in 2022. Traditional hubs like Europe have seen their share decline (EU manufacturers produced roughly 15% of global vehicles in 2022). Meanwhile, regional production clusters have solidified – for instance, around Germany in Europe, around the US in the Americas, and around China (and Japan) in Asia. This globalization means that the supply chain for any given vehicle is truly international: a European car may contain battery cells from Korea, semiconductors from Taiwan, wiring harnesses from North Africa, and software from California, assembled together in a German factory. Such interdependence also exposes the sector to global shocks – recent crises like the pandemic, war in Ukraine, and US-China tensions have prompted firms to reassess and “reshuffle” supply chains at all stages, from sourcing of materials to distribution.

II. Key Trends Shaping Mobility Supply Chains

Several powerful trends are transforming the industrial and mobility supply chain landscape, creating both challenges and M&A opportunities:

1. Electrification and Technological Shift

The automotive value chain is shifting towards electric, connected, and autonomous vehicles, disrupting long-established industry structure. Electric vehicles (EVs) require new core components (high-voltage batteries, e-motors, power electronics) while traditional parts like combustion engines and multi-gear transmissions diminish in importance. This has set off a race for battery technology, powertrain software, and semiconductor supply. Legacy suppliers focused on combustion-era technologies face pressure to pivot or consolidate. At the same time, automakers are investing heavily in software and digital services (“servitisation”) to add value beyond the hardware. The net effect is a significant reallocation of value within the chain – for example, batteries can represent 30-40% of an EV’s cost, funnelling revenue toward battery cell and materials suppliers. Many incumbent suppliers are struggling to keep up with the rapid pace of innovation required (from advanced driver assistance systems to AI software), which in turn is prompting partnerships, acquisitions, or exits. Indeed, OEMs have increasingly turned to acquisitions or alliances to obtain cutting-edge tech (for instance, in autonomous driving and software) rather than developing everything in-house, in order to shorten time-to-market. The transformative impact of electrification is evident in Europe’s supplier base: the pivot away from combustion has contributed to a series of restructuring moves – even top-tier suppliers (ZF, Bosch, Webasto, to name a few) have recently announced job cuts or reorganization, underscoring the structural challenges faced in the EV transition.

2. Rise of Asian Players and Outbound Expansion

Asian firms – especially from China – have dramatically increased their weight in the global automotive supply chain. A decade ago, Chinese suppliers were marginal players internationally; today they are significant competitors across multiple component segments. By 2023, 9 of the world’s top 100 auto parts suppliers were Chinese (up from only 1 in 2012), collectively accounting for over 9% of Top-100 supplier revenue. This share is forecast to expand further, with analysts projecting that by 2030 roughly 17–20 of the top 100 suppliers could be Chinese, including potentially the world’s largest supplier (e.g. CATL in batteries). Chinese companies have built dominant positions in EV batteries and electronics – for example, CATL leads the global battery market, and Chinese firms also lead in areas like tires (e.g. Sailun), interior components, and safety systems. Crucially, China also controls much of the critical raw material processing for the EV transition: it processes a majority of the world’s lithium, cobalt, rare earth metals, and other key minerals used in batteries and electric drivetrains. This domination in upstream materials and battery supply gives Asian (especially Chinese) firms a strategic advantage in the new mobility ecosystem.

Equally noteworthy is the surge in outbound investment by Asian mobility companies. Faced with fierce competition and overcapacity at home, Chinese EV makers and suppliers have turned to global markets at an unprecedented scale. In fact, Chinese automakers’ overseas investment in the EV value chain soared to an average of $30+ billion per year during 2022–2024, up from only ~$8.5 billion annually in 2018–2021. For the first time, in 2024, Chinese auto companies invested more abroad than domestically – a historic pivot driven by saturated home markets and a strategic push to “go global.” This has translated into multiple greenfield projects and acquisitions worldwide. In Europe, Chinese battery and component manufacturers have been aggressively setting up production facilities: e.g. CATL’s €1.8B battery cell plant in Germany (Erfurt) is ramping up to 14 GWh capacity; EVE Energy is investing in a large battery factory in Hungary; and others have built plants for tires, chassis, and drivetrain parts across Eastern Europe. Between 2024 and 2026, Chinese suppliers are slated to open at least 17 new factories in Europe (11 battery gigafactories, 2 powertrain plants, 2 electronics plants, etc.), primarily in EV-related fields. Alongside greenfield investments, Chinese firms have actively pursued M&A – about 40 acquisitions of European automotive suppliers by Chinese companies have occurred in the last five years, giving them quick access to technology, brands, and distribution networks in the West. Prominent examples include Chinese investors taking over Italy’s Pirelli (tires), Germany’s Kiekert (locks), Grammer (seating), and most recently Leoni AG, a major German wire harness manufacturer (case study below). This trend reflects a broader strategy: as Chinese OEMs (like BYD, Geely, SAIC, Chery) expand globally, they are bringing their supply chain with them – either by acquiring established Western suppliers or by transplanting their own supplier operations overseas. The net result is that Asian players are capturing a growing share of the industrial value-add in global automotive production. Western incumbents are increasingly on the back foot, facing cost-competitive and technologically advancing rivals from Asia.

3. Supply Chain Reconfiguration: Resilience, “Friend-Shoring” and Policy Influences

Recent geopolitical tensions and supply disruptions have prompted a strategic reconfiguration of supply chains in the mobility sector. Companies and governments are now more keenly aware of supply chain resilience and national security concerns, especially around critical technologies (batteries, semiconductors) and critical materials. In practice, this has meant new investment patterns: for instance, the United States and Europe have rolled out incentives (the U.S. Inflation Reduction Act, EU Important Projects of Common European Interest, etc.) to localize production of EV batteries, chips, and renewable energy components. Major Western OEMs have entered into joint ventures with Asian battery makers to build local gigafactories – dozens of such JV deals have been announced since 2021 (GM with LG Energy; Ford with SK On; Stellantis with Samsung SDI; Volkswagen with Northvolt, etc.). Similarly, carmakers are directly investing upstream to secure raw materials (signing lithium and nickel offtake agreements, investing in mining projects in Australia, Africa, Canada, etc.). These moves are creating new alliance structures up and down the value chain, often blurring traditional industry boundaries (e.g. oil companies like Total and BP investing in battery and charging networks, tech companies partnering on autonomous driving). On the other hand, protectionist currents are also shaping strategy: for example, the European Union launched an anti-subsidy inquiry into Chinese EV imports in 2023, considering tariffs to shield European manufacturers. In response, China warned its automakers to reconsider investments in certain EU countries that back such tariffs. These political dynamics can influence where companies choose to build factories or acquire targets (Chinese firms have favored investment in “welcoming” jurisdictions in Eastern Europe, for instance, while pausing projects in markets perceived as hostile). Overall, the supply chain is becoming more regionally focused (“friend-shoring”), yet the interdependence remains high – complete decoupling is unrealistic in the short term given Asia’s lead in numerous sub-components (as one industry analysis noted, “there is no realistic way to avoid sourcing commodity components from China” in today’s auto industry). Thus, we see a mix of collaboration and competition: Western governments seek to foster local champions, but Western firms also recognize the need to partner with Asian technology leaders to stay competitive. This tension itself is driving M&A and joint ventures as firms jockey to position themselves in an evolving global supply network.

4. Consolidation and Investment Opportunities

The rapid shifts in the mobility landscape have created pockets of financial stress as well as strategic opportunity. On one side, several legacy suppliers in Europe are financially strained – especially those mid-sized firms caught by the double impact of electrification (requiring new investment while legacy revenues decline) and global price competition. Some have undergone restructurings or asset sales, making them potential acquisition targets for investors or overseas competitors. A striking recent example was Sweden’s battery startup Northvolt – once a symbol of Europe’s EV ambitions – which had to suspend expansion plans and even filed for U.S. Chapter 11 protection for one unit in late 2024, amid sluggish EV demand and intense Chinese competition in the battery sector. Similarly, numerous Tier-2 and Tier-3 suppliers across Germany and elsewhere are up for sale or seeking capital injections. This presents M&A opportunities for those looking to acquire valuable industrial know-how or manufacturing capacity at a discount. Many Asian companies (and some private equity funds) see an opening to pick up advanced engineering companies, established brands, or even distressed OEM assets in Western markets. On the other side, cash-rich automakers and suppliers are using M&A offensively to realign their portfolios – shedding non-core divisions and buying into high-growth areas. For instance, we have seen global automakers divesting legacy fuel-engine businesses (often carving them out into new joint ventures) while investing in e-mobility and software companies. The Renault–Geely powertrain joint venture in 2023, which merged their combustion-engine divisions to free up resources for EVs, is a case in point. Overall, the pace of deal-making in the auto-tech space has accelerated: the OECD reports that automotive-sector M&A activity has grown significantly over the past decade, especially acquisitions targeting tech firms in areas like autonomy and electrification.

All these forces suggest that consolidation is not a crisis but rather an opportunity: a chance for new investors to step in with fresh capital, for stronger players to acquire innovative startups or distressed rivals, and for cross-border partnerships to reshape the industry. Below, we highlight two recent case studies that exemplify these trends – one involving an Asian company investing in a European industrial supplier, and another involving a Western OEM partnering with Asian EV technology.

III. Deep Dive Case Studies (2023–2025)

Case Study 1: Chinese Investment Revives a German Supplier (Luxshare–Leoni)

One notable deal was the acquisition of a majority stake in Leoni AG by China’s Luxshare. Leoni, a 100-year-old German automotive supplier specializing in wiring harnesses and cable systems, had been struggling financially during the EV transition. After a failed divestiture of its cable division pushed it into distress, Leoni underwent a major restructuring in 2023 and was taken private by an investor. In September 2024, Luxshare ICT – a Chinese electronics and automotive components group – agreed to buy 50.1% of Leoni and effectively assume control. The transaction, completed in 2025 after regulatory approvals, valued the controlling stake at approximately €320 million. Luxshare also acquired Leoni’s Automotive Cable Solutions unit (through a subsidiary) as part of the deal.

Strategic rationale:

This partnership marries Leoni’s entrenched position as a wiring supplier to virtually all the major Western automakers with Luxshare’s strengths in electronics and connections to the booming Chinese EV sector. Leoni brings a long-standing OEM customer base and deep engineering expertise, while Luxshare provides financial strength and access to high-growth EV manufacturers (Luxshare is a supplier to Tesla in China and to several Chinese automakers). The companies noted that as Chinese electric vehicle OEMs expand into Europe and North America, Leoni (under Luxshare’s ownership) will be well-positioned as a “trusted partner” to support those new entrants with advanced wiring systems. In other words, the deal gives Luxshare a respected platform in Europe, and it secures Leoni’s future by integrating it into a global supply chain oriented toward EVs. Leoni’s CEO hailed the investment as “enhancing Leoni’s competitiveness across all fronts,” while Luxshare’s CEO described it as a “pivotal step” toward becoming a global automotive leader. Notably, Leoni’s situation also reflects the broader pressures on EU suppliers: the German auto industry is grappling with the move from combustion engines to electric, and competition from Asia is intensifying. A number of European suppliers have faced profitability issues, prompting consolidation moves like this. For Luxshare, acquiring Leoni provides not only technology and R&D talent but also immediate relationships with Western automakers – something that might have taken years to build organically. In sum, this case demonstrates how Asian investors are capitalizing on Europe’s industrial openings, injecting capital into underperforming firms and aligning them with the new growth areas of mobility. It’s an example of a win-win: Leoni’s turnaround is secured and its ~95,000 jobs stabilized, while Luxshare gains a foothold to serve the wire-harness needs of EV makers globally.

Case Study 2: Western OEM Partners with Chinese EV Innovator (Stellantis–Leapmotor)

While Chinese firms have been buying into Europe, we also see Western companies looking East for technology. In October 2023, Stellantis N.V. (the Europe-U.S. auto group behind Peugeot, Fiat, Jeep, etc.) announced a strategic partnership with China’s Leapmotor, a young electric vehicle manufacturer. Stellantis agreed to invest approximately €1.5 billion for a 21% stake in Zhejiang Leapmotor Technologies – marking one of the largest foreign investments in a Chinese EV firm to date. As part of the deal, the companies are forming a new joint venture (Stellantis 51%, Leapmotor 49%) that will have exclusive rights to export and sell Leapmotor’s EV products outside China. In essence, Stellantis gains access to Leapmotor’s advanced EV platform and technology, and in return Leapmotor gets a pathway to expand into international markets via Stellantis’ global distribution network.

Strategic rationale:

For Stellantis, this move is about catching up in electric tech and re-establishing a foothold in China – the world’s largest auto market and the epicenter of EV innovation. Like other legacy automakers, Stellantis had been “playing catch-up” in the EV race, and its sales in China were lackluster. By partnering with Leapmotor, Stellantis immediately taps into a pipeline of competitive EV models and underlying technology (batteries, electronics, software) developed in China’s high-pressure market. Stellantis’ CEO Carlos Tavares was blunt about the rationale: “The Chinese offensive is visible everywhere… With this deal we can benefit from it rather than being the victims of it.” In other words, rather than simply worry about Chinese EVs undercutting Peugeot or Fiat in Europe, Stellantis decided to ally with a Chinese player and share in the growth and cost advantages Chinese firms have achieved. Analysts noted that China is at the forefront of EV technology and enjoys a huge cost advantage, so this stake gives Stellantis a relatively affordable way to acquire cutting-edge know-how (a “de-risking” step, as one analyst called it). For Leapmotor, a smaller EV maker amid dozens of Chinese competitors, Stellantis’ investment is a major validation and provides capital and global reach. The joint venture will allow Leapmotor-designed vehicles to be manufactured and sold overseas – effectively giving the Chinese brand a European/American market entry with the backing of an established player. This case exemplifies a trend of new cross-border alliances: it followed on the heels of a similar partnership in July 2023, when Volkswagen invested $700 million for a 4.99% stake in China’s XPeng and agreed to co-develop EVs on XPeng’s software platform. These alliances “herald a new era” of cooperation, reflecting China’s rise as a global center of EV technology and the recognition by Western OEMs that they must integrate some of that Chinese innovation to remain competitive. The Stellantis-Leapmotor deal, once approved by regulators (Chinese authorities greenlit it in 2024), could become a blueprint for other automakers seeking similar tech partnerships. It’s a reminder that in the global supply chain, knowledge flows are now a two-way street – no longer just Western tech going east via joint ventures, but also Asian tech coming west via equity tie-ups. From an investment banking perspective, we can expect more such minority stake investments, joint ventures, and licensing deals as the industry’s incumbents and insurgents form an increasingly interdependent ecosystem.

Other notable cases include:IV. Conclusion and Outlook

The intersection of global supply chains and M&A in the industrial mobility sector is creating a dynamic deal landscape. The overarching narrative is one of realignment: the shift to electric and connected vehicles is reshuffling the value chain positions of companies and even entire regions. This realignment produces clear opportunities for strategic M&A and investments. Cash-rich players (whether large OEMs or new entrants) can acquire distressed but technologically rich suppliers to bolster their capabilities. Likewise, companies that find themselves lagging in a critical area (battery tech, software, AI, etc.) may seek mergers or partnerships to avoid being left behind. Geographically, we see capital flowing from Asia into Europe to seize high-value industrial assets, and conversely Western firms investing into Asia (or partnering with Asian firms) to secure innovation and cost advantages. The result is a wave of consolidation that is knitting together a new global supply chain fabric for the EV era.

For clients and investors, several themes emerge: (1) Supply Chain Vertical Integration – Automakers and Tier-1 suppliers are likely to continue upstream acquisitions (mining, materials, battery production) and downstream investments (charging networks, software services) to control more of the value chain and ensure supply security. (2) Cross-Border Tech Synergies – We expect more deals like VW–XPeng or Stellantis–Leapmotor, where East-West partnerships unlock mutual benefits (market access for one side, technology infusion for the other). (3) Restructuring-driven M&A in Europe – Europe’s supplier base, especially in Germany, will continue to consolidate. Some venerable firms will seek buyers due to financial distress or succession issues, and Asian investors (as well as North American and global PE funds) will be keen bidders. The feeling that “European industrial champions are faltering and Asians are buying them out” is now supported by multiple data points – from Chinese firms accounting for 40+ takeovers of European suppliers in recent years, to large investments like Luxshare-Leoni. Rather than being a cause for alarm, this trend can be framed as an inflow of capital and know-how that helps modernize assets and keep them competitive. (4) Policy and Regulatory Backdrop – Deals in this space will face growing government scrutiny (e.g. foreign investment review for Chinese takeovers in the EU, or export controls on sensitive tech). Investors need to navigate these carefully, structuring partnerships or JVs in ways that align with national interests (for instance, by preserving jobs or adding local production). Notably, despite some protectionist headwinds, Chinese investment in Europe’s EV sector jumped 80% in 2024 (to €9.4bn) as per provisional data, underscoring that the momentum of capital flows remains strong.

In summary, the industrial mobility sector is at an inflection point where global supply chain shifts and consolidation are two sides of the same coin. Companies that recognize and act on these trends – through smart M&A, joint ventures, and supply chain realignment – stand to reinforce their positions. For our boutique firm’s clients, especially those in the EU mobility supply chain, staying informed on these global dynamics is critical. There will be opportunities to either find strategic investors from abroad, or to become acquirers of critical technology themselves. The examples of Luxshare-Leoni and Stellantis-Leapmotor illustrate that success will favor the bold and the collaborative. As the value chain continues to evolve toward a cleaner and more digital future, strategic deal-making will be a key lever in building the resilient, globally integrated businesses that can thrive in the new automotive era.

Author:

Valentin Ischer

Managing Director

valentin.ischer@arc-group.com  

 

Author:

Charlene Lui

Associate

charlene.lui@arc-group.com

Author:

Felix Chu

Vice President

felix.chu@arc-group.com

Author:

Henry Wang

Analyst

henry.wang@arc-group.com

The financial figures and transaction details presented in case studies are derived from publicly available sources, including press releases and media reports. As such, they are intended for illustrative and educational purposes only and may not fully reflect the actual deal structure, terms, or confidential elements of the transaction. Readers should not rely solely on this information for investment, legal, or financial decision-making.

References

• OECD – The Future of the Automotive Value Chain (2024). https://www.oecd.org/content/dam/oecd/en/publications/reports/2024/11/the-future-of-the-automotive-value-chain_91460165/cb730d65-en.pdf
• Merics – China’s Outbound EV Investment Tracker / Europe–China FDI Reports (2024–2025)
• Global Automotive Supplier Rankings – Automotive News Top 100 Global Suppliers (2023)
• International Energy Agency (IEA) – Global EV Outlook (2023–2024)

The post Global Supply Chains and M&A: Opportunities in Industrials and Mobility first appeared on ARC Group.

In practice, however, several Chinese companies struggle to replicate their domestic success once they begin operating in Southeast Asia. Expansion optimism often collides with strategic misjudgments, regulatory surprises, operational bottlenecks, cultural friction, and reputational challenges. This article examines why supply chain expansion into SEA often underperforms, highlights real examples of both success and failure, and outlines the strategic imperatives Chinese executives must internalize before committing to the region.

The Core Misread: SEA Is Not “Southern China 2.0”

A recurring issue is the assumption that Southeast Asia will resemble the business environment Chinese companies are familiar with at home. Many envision abundant affordable labor, supportive industrial parks, streamlined permitting, and predictable government backing. In reality, the region is far more fragmented and multifaceted. Each country has its own political dynamics, regulatory frameworks, cultural norms, and development constraints.

Chinese executives often discover that the management approach that worked in China does not transfer seamlessly to SEA. Unlike China’s relatively unified regulatory regime and fast administrative processes, SEA presents a patchwork of legal systems, bureaucracies, and political sensitivities. Firms mistakenly assume that local governments will offer China-style preferential treatment or overlook compliance gaps. Instead, SEA governments welcome investment on defined terms, with stricter enforcement and higher scrutiny, particularly for foreign companies with large footprints.

This gap between expectation and reality forms the basis of many strategic, operational, and commercial pitfalls.

Three Categories of Pitfalls Facing Chinese Firms in SEA

Across countries and industries, most hidden challenges can be grouped into three broad categories including strategic, operational, and commercial & compliance. Understanding these can help companies diagnose where their expansion model is weakest.

1. Strategic Pitfalls

Strategic failures typically come from flawed assumptions and planning. Many firms treat SEA as a single, uniform market or view it as a smaller, slower version of China. This leads to overoptimistic cost projections, unrealistic timelines, and misaligned market entry sequencing. Some select unsuitable entry markets, while others expand into multiple countries before establishing a stable base.

Overdependence on anticipated government incentives is another misstep. Firms often assume tax breaks or subsidies will materialize quickly and smoothly, only to face delays, strict compliance conditions, or changes in political priorities. Regulatory surprises are common: halal certification rules in Indonesia, energy-efficiency labeling in Thailand, country-specific product testing, and new ESG compliance obligations can delay or block launches. Without deep pre-entry scanning of policy landscapes, firms expose themselves to expensive and avoidable mistakes.

2. Operational Pitfalls

Operational challenges emerge once production begins. One of the most common issues is overestimating the maturity of local supply chains. Except for a few advanced clusters, SEA does not yet match China’s dense and highly capable supplier networks. Companies expecting China-like sourcing convenience often confront higher import dependency, longer lead times, and weaker supplier capability.

Talent is another significant constraint. SEA markets face severe shortages of engineers, technicians, and middle managers. Manpower’s 2025 survey indicates approximately 77 percent of Asia-Pacific employers report difficulty finding skilled labor. Combined with different work cultures, this leads to slower productivity ramp-ups, weakened process control, and higher defect rates. New plants often require significantly more time than planned to achieve stable output. The operational reality regularly proves more demanding than Chinese managers anticipate.

3. Commercial & Compliance Pitfalls

On the commercial side, ineffective partner selection remains a common vulnerability. Rushed decisions or reliance on personal networks can lead to choosing distributors or joint venture partners with limited capability or misaligned incentives. Misreading local consumer behavior also undermines performance, especially when pricing, channel design, or marketing strategies are transferred directly from China.

Compliance shortcomings also carry substantial risks. Companies may overlook country-specific certifications, testing requirements, or legal obligations. Non-compliance can result in penalties, loss of incentives, reputational damage, or forced operational restructuring. In markets where transparency and labor protections are high priorities, missteps escalate quickly into public or governmental scrutiny.

Case Studies: Success and Failure in Practice

Success: SAIC–GM–Wuling’s EV Strategy in Indonesia

SAIC–GM–Wuling represents a strong example of Chinese companies’ effective localization in SEA. Rather than depending solely on CKD assembly, Wuling invested in a fully localized EV manufacturing base in Indonesia, integrating production, R&D, and later local battery supply. The company achieved Indonesia’s 40 percent local content requirement, unlocking incentives, and built strategic partnerships with state-owned enterprises on charging networks and talent development. By encouraging key Chinese suppliers like Gotion to co-locate, Wuling established a functional ecosystem around its plant. Strong after-sales service and nationwide dealer coverage helped build trust, enabling Wuling to capture over 37 percent of Indonesia’s EV market and produce more than 40,000 units of the locally assembled Air EV. The case demonstrates that deep localization, compliance discipline, and ecosystem-building translate directly into competitive advantage.

Failure: Hozon Neta’s Setback in Thailand

Hozon’s Neta provides a cautionary counterexample. The company entered Thailand aggressively in 2022, supported by generous EV subsidies contingent on meeting local production commitments. Although Neta initially recorded strong sales exceeding 12,000 units in 2023, it failed to meet its production milestones, making it unlikely to achieve the required 19,000 locally assembled units by end-2025. Its parent company’s financial distress further limited investment. Customers subsequently faced spare-part shortages, service-center closures, and more than 220 official complaints. Sales plummeted, staff and dealerships were cut, and regulators signaled the possible withdrawal of subsidies. Neta’s experience underscores the risks of prioritizing sales growth ahead of building stable operations, financial resilience, and after-sales infrastructure.

Social Backlash: Lessons from Nickel and Apparel

In Indonesia’s nickel industry, several Chinese-backed smelters have faced escalating tension over safety lapses, wage disparities, and insufficient engagement with local workers. At the GNI smelter in Sulawesi, unresolved grievances culminated in a 2023 incident that resulted in fatalities and significant property damage. Government intervention followed, highlighting how labor issues can rapidly escalate into national policy scrutiny.

In Cambodia’s garment sector, a Chinese-owned factory in Kampong Speu faced protests when more than 7,000 workers walked out over punitive rules and excessive unpaid overtime. Authorities intervened, and the company was required to revise its practices. These cases reinforce the importance of labor standards, community engagement, and cultural sensitivity in SEA.

Strategic Imperatives for Chinese Companies Entering SEA

For Chinese industrial and manufacturing firms, the overarching message is clear: success in SEA requires a fundamentally different approach from success in China. High-performing companies localize their operations, invest in talent, and build supplier ecosystems, rather than running SEA subsidiaries as extensions of a China-centric model.

Key imperatives include:

• Conduct deep market and regulatory research to avoid misinterpretation and unforeseen constraints.
• Customize strategy for each country, recognizing their political, cultural, and regulatory differences.
• Invest early in local talent development, empower local management teams, and reduce reliance on expatriate-heavy structures.
• Build strong compliance foundations, securing permits, understanding incentive conditions, and preparing ESG and regulatory plans in advance.
• Engage proactively with governments, communities, and workers, demonstrating transparency and long-term commitment.
• Adopt a patient, incremental view of success, avoiding China-based expectations of scale or speed.

As one experienced advisor remarked, companies must sometimes “unlearn the China success narrative” because evaluating SEA through a China lens leads to disappointment and frustration. SEA requires humility, patience, and genuine willingness to adapt.

The good news is that the opportunities are substantial. A booming consumer base, strategic geography, and growing manufacturing ecosystems make Southeast Asia one of the most attractive destinations for Chinese supply chain expansion. With careful planning, localized execution, and a long-term mindset, Chinese firms can turn the region’s complexity into lasting competitive advantage.

Ultimately, the lessons from Chinese expansions in Southeast Asia are clear. Regulatory hurdles, operational gaps, and cultural blind spots are not isolated events but symptoms of deeper strategic and commercial misalignments. The contrasting outcomes of Wuling and Neta show success in SEA is determined not by investment scale but by localization depth, compliance discipline, and early investment in people, partners, and after-sales capability. SEA is not a low-cost extension of China but a distinct region where companies must adapt to local rules and expectations. Companies that enter with preparation and long-term commitment will outperform, while those that underestimate the region will continue to face setbacks.

Author:

Kelly Nguyen

Associate

Author:

Clyde Tran

Analyst

The post What Chinese Companies Miss When Expanding Supply Chains into Southeast Asia first appeared on ARC Group.

Under the terms of the Agreement, BGLC, at its sole discretion, may issue and sell registered shares of its common stock to ARC over the commitment period of 36 months. In consideration for ARC’s commitment, BGLC issued 175,000 shares of common stock as a one-time fee, priced at the closing price on Nov 26, 2025 – $4.32. ARC is prohibited from owning more than 9.99% of BGLC’s outstanding shares at any time and is restricted from short-selling or hedging the Company’s securities. The Company will file a registration statement to register the resale of shares issued under the Facility, and no shares may be sold prior to registration.

The Facility complements BGLC’s previously announced $20 million At-The-Market program, enhancing the Company’s financial flexibility while preserving strategic control over the timing and scale of capital deployment.

“This commitment from ARC strengthens our capital position at a pivotal time for BGLC,” said Sam Tan, Chief Executive Officer of BioNexus Gene Lab Corp. “Following our recently executed exclusive licensing agreement for the VitaGuard MRD platform in Southeast Asia, and with the ongoing transformation of our business into a CDMO capable of supporting high-value bioprocessing and manufacturing, we are building a diversified biotechnology platform with multiple growth pathways.”

“Importantly, this Facility is entirely at our discretion and is intended to support milestone-driven initiatives rather than routine financing,” Tan added. “We intend to draw from this resource selectively and responsibly as we advance our diagnostics, CDMO, and therapeutic commercialization programs.”

Please refer to the Company’s Form 8-K filed on December 2, 2025 regarding this transaction for more pertinent details concerning the Facility.

Advancing Precision Oncology in Southeast Asia

On November 28, 2025, BGLC executed a definitive licensing agreement with Fidelion Diagnostics Pte. Ltd. to commercialize the VitaGuard™ MRD assay, a next-generation liquid biopsy platform for early cancer detection, recurrence monitoring, and precision-treatment decision making. The ARC Facility enhances BGLC’s ability to support clinical adoption, regulatory pathways, and infrastructure development necessary to bring MRD testing to broader populations across Malaysia, Singapore, Indonesia, and Thailand.

Supporting BGLC’s CDMO Transformation

BGLC continues to expand its business to include contract development and manufacturing organization services, enabling the Company to participate in biologics production, assay manufacturing, and high-performance diagnostic supply chains. The Facility strengthens BGLC’s ability to invest in quality-systems upgrades, manufacturing capacity, technical capabilities, and strategic partnerships aligned with global CDMO standards.

Advancing Therapeutic Opportunities

The Company also continues to progress the strategic partnership initiative with BirchBioMed Inc., the subject of a recently announced non-binding term sheet, including regional regulatory planning for FS2, a topical therapeutic candidate targeting fibrosis, hypertrophic scarring, and skin regeneration. The Facility provides capital optionality to support clinical, regulatory, and commercial preparations as the term sheet potentially moves into a definitive partnership. For more information, visit www.birchbiomed.com.

About BioNexus Gene Lab Corp.

BioNexus Gene Lab Corp. (Nasdaq: BGLC) is an emerging provider of precision medical diagnostics solutions, expanding into contract development and manufacturing services. Through its subsidiaries, the Company is expanding its capabilities in oncology diagnostics, biologics development, specialty manufacturing, and integrated laboratory services across Southeast Asia. BioNexus Gene Lab Corp. is headquartered in Kuala Lumpur, Malaysia.

For more information, visit www.bionexusgenelab.com.

About ARC Group International Ltd.

ARC Group is a global investment bank, asset manager and management consultancy firm established in 2015. The firm specializes in capital markets, mergers & acquisitions, strategic advisory, and asset management, supporting clients through complex cross-border transactions and offering tailored financing solutions. ARC Group operates across twelve countries and three continents, providing expertise in sectors ranging from technology and digital assets to consumer goods and advanced industries. For more information, visit www.arc-group.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s growth strategy, expansion plans, expected use of proceeds, commercialization of the VitaGuard MRD platform, development of CDMO capabilities, therapeutic initiatives, and the anticipated benefits of the Equity Purchase Agreement and ATM program. Forward-looking statements are based on current expectations, estimates, forecasts, and projections and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements. These risks and uncertainties are described in the Company’s filings with the U.S. Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date hereof, and the Company undertakes no obligation to update any forward-looking statements except as required by law.

For media inquiries, please contact:

Anna Sahlberg Carlsson
Marketing Manager
anna.sahlberg@arc-group.com

The post BioNexus Gene Lab Corp. (Nasdaq: BGLC) Secures $500 Million Equity Facility From ARC Group International to Support Expansion of Precision Diagnostics, CDMO Operations, and Therapeutic Commercialization first appeared on ARC Group.

Early planning, accounting readiness, and audit currency create the foundation for a clean listing process, but the real execution test starts once drafting begins. Mid stage delays often emerge when coordination becomes more complex and multiple workstreams must move in parallel. The next set of pitfalls focuses on issues that surface during this phase, from misalignment with service providers to gaps in governance and management preparedness. Addressing these risks with discipline is essential to maintaining momentum and protecting the listing timeline.

4. Misalignment When Choosing Service Providers

Service providers are central to a successful listing. Legal counsel, auditors, the financial advisor, tax specialists, and other firms must operate in sync for the transaction to move cleanly. Because every workstream is interconnected, misalignment between the issuer and its providers is one of the most common causes of execution friction.

The issue is rarely pure capability. It is often a mismatch between the issuer’s needs and the provider’s experience navigating U.S. public-company requirements. When service providers are unfamiliar with SEC expectations or exchange procedures, responses to comments take longer, disclosure updates require more iterations, and routine issues become time sinks. These inefficiencies extend the schedule and create avoidable uncertainty.

Execution Lesson:

Issuers should select service providers whose expertise, communication style, and transaction experience align with the specific demands of a U.S. listing. While high-quality advisors may require a greater upfront investment, their ability to anticipate issues, coordinate efficiently across workstreams, and resolve regulatory questions quickly often results in meaningful time and cost savings over the course of the transaction. Choosing experienced providers reduces the risk of rework, prevents avoidable delays, and ensures a smoother and more predictable execution process.

Strong issuers select service providers whose expertise and working style fit the demands of a U.S. listing. Although more experienced advisors may require a higher upfront investment, they anticipate issues earlier and coordinate more efficiently across workstreams. This reduces rework, prevents avoidable delays, and delivers a smoother and more predictable execution process.

5. Selecting an Inefficient Domicile or Jurisdiction

Corporate domicile is more than a legal formality. It influences the level of regulatory scrutiny, the speed of legal opinions, and the familiarity of the structure to investors and exchanges.

For U.S. issuers, Delaware remains the preferred jurisdiction due to its predictable corporate law and extensive case precedent. For FPIs, offshore holding structures such as the Cayman Islands or British Virgin Islands offer tax neutrality, simplified governance, and smoother recognition among global investors.

Selecting a jurisdiction unfamiliar to regulators or counsel can complicate reviews, delay legal opinions, and trigger additional disclosure requirements.

Execution Lesson:

Strong issuers finalize jurisdiction early in the structuring stage with both onshore and offshore counsel. Any re-domiciliation after filing introduces additional disclosure obligations and shareholder approvals, which almost always result in timing setbacks. The right jurisdiction removes friction; the wrong one guarantees it.

6. Incomplete Corporate Housekeeping

Many listing delays stem from avoidable administrative inconsistencies uncovered during legal or financial due diligence. These typically include misaligned share registers, missing board resolutions, incomplete capitalization tables, or share issuances not properly authorized or documented.

These issues rarely reflect on the quality of the business, but they materially affect execution because counsel cannot certify completeness. Exchanges may withhold approval until all discrepancies are resolved.

Execution Lesson:

Before preparing the registration statement, strong issuers run a governance scrub before drafting begins. This internal review verifies that historical share issuances, option grants, and shareholder approvals are properly authorized and supported by executed records.

Ensuring that board resolutions and shareholder consents are aligned across all subsidiaries and holding entities will significantly streamline the due diligence and regulatory review process, minimizing last-minute legal complications.

7. Management Not Ready for Public Company Demands

Many issuers underestimate the step-change from running a private company to operating a listed one. Public companies face higher expectations for disclosure, financial discipline, internal controls, and investor communication. Management teams without prior public-company experience often find this shift challenging when preparation starts too late.

The investor roadshow is where this gap becomes most visible. Management must articulate strategy, defend financials, and respond confidently to institutional investor questions. Weak preparation undermines credibility, slows book-building, and reduces pricing power.

Execution Lesson:

Strong issuers prioritize management readiness early. They train management on public-company responsibilities, prepare them for investor engagement, and bring in directors with public-company experience in the same sector. A prepared management team strengthens credibility and supports a smoother roadshow and listing.

Author:

WK Khor

Analyst

 

The post Small Operational Mistakes that Delay Big Listings: Part 2 first appeared on ARC Group.

Hosted by Teal Asia, the event brought together partners, healthcare advocates, and supporters to raise awareness of cervical cancer prevention and to spotlight efforts across Malaysia to empower women through accessible HPV screening and community care.

During the evening, attendees witnessed Malaysia joining the world in illuminating landmarks in teal, the international colour for cervical cancer elimination, symbolizing unity, hope, and collective action.

A key highlight of the initiative was the recognition of Selina Yeop Junior, a strategic partner to ARC Group  and cervical cancer survivor who was nominated by the Gates Foundation for her advocacy work. Her efforts have helped mobilize support for awareness, screening access, and early detection across the region.

The event also supported the ROSE Foundation, a non-profit organization dedicated to eliminating cervical cancer in Malaysia through HPV self-sampling and impactful community outreach.

ARC Group was honoured to stand alongside organizations driving positive social impact, reinforcing our commitment to supporting meaningful causes and community health initiatives across the region.

About ARC Group

ARC Group is a global investment banking and advisory firm providing M&A advisory, capital markets, and strategic financial solutions to businesses worldwide. With a strong presence across Asia, Europe, and the United States, ARC Group has built a robust track record in cross border M&A, supporting emerging growth companies, mid-market leaders, and multinational corporates in navigating complex transactions and unlocking long term value.

For more information or any questions, please contact:

Anna Sahlberg Carlsson
Marketing Manager
anna.sahlberg@arc-group.com

The post ARC Group Supports the “Lighting the Way to Cervical Cancer Elimination” Initiative at Kuala Lumpur Charity Event first appeared on ARC Group.

In capital markets, success is built on discipline, not luck. Markets will reward a strong story and healthy demand but only if the execution workstreams run clean. In practice, deals rarely slip because of valuation or investor appetite. They slip because of operational errors that appear small in isolation and become material when timelines compress.

A U.S. listing, whether through a traditional IPO, reverse takeover or de-SPAC transaction, requires precise coordination among management, auditors, legal counsel, the financial advisor, underwriters, and regulatory authorities. Each party operates on a tightly coordinated timeline. Even minor administrative oversights, such as an outdated audit report, incomplete shareholder register, or unsubmitted exchange form, can disrupt the entire process and lead to costly rescheduling.

The following sections highlight several recurring operational pitfalls that have delayed listings and outlines practical measures to mitigate them.

1. Insufficient Planning and Readiness

A common yet underestimated cause of delay in public listings is insufficient early-stage planning. Many issuers underestimate the time required to upgrade internal infrastructure, governance frameworks, and reporting discipline expected in a public company.

Comprehensive preparation extends far beyond financial performance. Strong issuers build a readiness calendar months before filing. They align management responsibilities early, run financial tie-outs ahead of schedule, and treat disclosure preparation as part of strategic planning, not a compliance chore. Listings that start with operational discipline finish within their intended window.

Execution Lesson:

Strong issuers begin the listing readiness process well before formal filings. This involves setting realistic internal timelines, identifying potential bottlenecks across workstreams, and ensuring early coordination among management, auditors, counsel, and the financial advisor. A proactive and front-loaded discipline not only prevents operational delays but also allows the company to approach the market with stronger governance, clearer disclosures, and greater investor confidence.

2. Inadequate Accounting Framework Preparation

A recurring cause of delay, especially for foreign private issuers, is failing to convert financial records into U.S.-accepted accounting frameworks early in the process. Many foreign companies maintain books under home-country standards that the SEC does not recognize. Domestic issuers must report under U.S. GAAP, and qualified FPIs may use IFRS as issued by the IASB. Any issuer outside these frameworks must convert, restate, and reconcile multi-year financials before filing.

When this conversion starts late, it becomes a critical-path bottleneck. Restating historical numbers, revising accounting policies, and producing GAAP- or IFRS-compliant disclosures consume significant time and resources. A slow conversion delays drafting, stalls the audit, and pushes the entire listing schedule back.

Execution Lesson:

Companies should begin the accounting-standards conversion process early and ensure that internal teams or external advisors are adequately prepared. Proper planning reduces the risk of downstream delays and allows the issuer to progress through SEC review with greater efficiency and accuracy.

3. Failure to Maintain Audit Currency

Audit staleness is one of the fastest ways to lose a listing window. The SEC and U.S. exchanges impose strict requirements on the recency of financial statements. For domestic issuers, audited financials included in a registration statement must generally not be older than 134 days from the balance-sheet date. For foreign private issuers (FPIs), audited financial statements must generally not be older than 12 months at the time the registration statement becomes effective^[1]. If more than nine months have passed since the fiscal year end, unaudited interim financial statements must also be included^[2].

When issuers fail to anticipate extended SEC comment periods, audits can become “stale,” necessitating a full refresh or reissuance of financial statements. This typically requires additional audit procedures, updated consents, and amended filings, each adding weeks to the schedule and incremental costs.

Execution Lesson:

Strong issuers establish an internal audit refresh calendar early on that aligns with the anticipated SEC comment timeline. This calendar is usually developed jointly with auditors to identify potential audit-update windows in advance. Additionally, draft versions of updated financials are encouraged early on in the event an audit refresh becomes necessary, so that it can be executed quickly without disrupting the broader transaction schedule.

Author:

WK Khor

Analyst

 

References:

[1] ARC Group (2025): Implications of Being a Foreign Private Issuer – ARC Group

[2] SEC (2011): gov | Financial Reporting Manual

The post Small Operational Mistakes that Delay Big Listings: Part 1 first appeared on ARC Group.