Research On Motivation And Performance Of Tianqi Lithium’s Cross-border M&A Of Tellison

Throughout the history of western economic development,the five waves of mergers and acquisitions have made Western capital markets mature and prosperous,especially the fifth wave of mergers and acquisitions since 1993.Entrepreneurs’ vision for development and growth is no longer confined to the country,but instead Expanding to the global market makes cross-border mergers and acquisitions a trend.The early rise of cross-border mergers and acquisitions has enabled foreign economists to accumulate sufficient theoretical guidelines and practical experience for their research.Since my country has gradually participated in the wave of mergers and acquisitions in 2009,the number of post-cross-border mergers and acquisitions has risen sharply,and the scale of mergers and acquisitions has also continued to expand.However,compared with domestic mergers and acquisitions,my country’s cross-border mergers and acquisitions are not mature,and the number of transactions is obviously small.The huge total capital of mergers and acquisitions of international companies has made the financial risk high,and the failure rate of mergers and acquisitions can even reach as high as 80%.Therefore,in recent years,cross-border mergers and acquisitions have become one of the hot issues studied by domestic scholars.On August 23,2012,Lockwood,a strong American competitor of Tianqi Lithium,announced the acquisition of all the shares of Australian company Talison.Before that,most of the raw materials of the two companies were provided by Talison.If its acquisition is successful,there is no doubt that Lockwood will substantially increase the price of raw material supply,or even cut off the supply,which will have a devastating blow to the price,quality and supply stability of Tianqi Lithium’s raw materials.Immediately,Tianqi Group designed a triangular merger and acquisition transaction structure on November 19,2012,implemented an interceptive cross-border acquisition of Australian lithium company Thalysson,and subsequently obtained sufficient funds through joint efforts with external investors,China Investment Corporation,and equity pledges.The acquisition was finally completed in February 2014.This article focuses on the causes and consequences of this cross-border merger and acquisition,and conducts a case study on the motivation and performance of the merger.It has high practical significance and provides a reliable theoretical basis for the subsequent cross-border mergers and acquisitions of foreign enterprises by Chinese private enterprises.With the support of M&A-related theories and literature in the same category,this paper first conducts background investigations on the non-ferrous metal industry and lithium processing industry where the parties to the M&A are located,analyzes the company profile and operating status of the parties to the M&A,and then analyzes the entire cross-sector The process of overseas mergers and acquisitions,and a tactical summary.Secondly,under the premise of combining industry conditions and company characteristics,research on the motivations of this cross-border M&A from the aspects of raw material supply,optimization of business structure,response to industry downside risks,consolidation of domestic position and development of international markets,etc.Third,this article uses event research methods,comparative analysis methods and other research methods to analyze the financial performance of Tianqi Lithium’s cross-border mergers and acquisitions.For example,consider the capital market stock price response after the merger is substantively successful.For example,use the 2012 to 2017 The horizontal and vertical ratios of annual financial data are used to study the before and after changes in operations,profitability,and debt repayment after the merger and integration of the company.Next,analyze the non-financial performance before and after the merger,which is mainly reflected in the company’s production capacity,customer scope,business structure,and scientific research strength.Finally,combining the company itself and its practical significance,a conclusion and a summary of recommendations are made on the case of Tianqi Lithium’s cross-border merger and acquisition of Tellison.