Study Of Multinational Mergers And Acquisitions Of Chinese Enterprises

TNCs' M&A practice in China is a new issue in Chinese economy. It changes the traditional way of utilizing foreign direct investment, and brings long -run impacts on China's economic reform. In detail, the motivations behind TNCs' M&A behavior, the effects brought by M&A, and government and enterprises' reasonable policy responses consist of our main concerns in this dissertation.Starting from literature review on TNCs' M&A, the dissertation depicts TNCs' M&A practice in China, based on these, key factors which affects TNCs' M&A behaviors are found. Then, motivations behind TNCs' M&A behavior are discussed which also provide a base for analyzing the effects brought by TNCs' M&A in China. After analyzing positive and negative effects, relative policy responses and management measures both from government regulation level and enterprise management level are proposed.Main conclusions in this dissertation are listed as follows:1. After 2000, TNCs' M&A practices are featured by: increasing scale of TNCs' M&A, TNCs' more requirements of corporate control and market share, and more industries involved in TNCs' M&A. Comparing with green field investment, TNCs' M&A shares faster growth rate.2. Enterprises, which dominate some specific markets or have monopoly powers, are main objectives in TNCs' M&A practices. However, in banking industries, local business banks rather than Large-Four Stated owned banks are TNCs' M&A objectives.3. Well-performed macro-economic indicators, competitiveness in manufacture industries, strong market network resources, acceptable policy environments, and accumulation of TNCs' experiences in Chinese market are key factors pushing the development of TNCs' M&A in China.4. The main motivation behind TNCs' M&A practices in China lies in compensating strategic gap in terms of resources and capabilities.5. TNCs' M&A practice likes a double sword. On one side, TNCs' M&A practices constitute a external force pushing China's further SOEs' reform, such as diversification of corporate ownership, enhancement of corporate governance structure, effective incentives mechanisms for corporate managers, upgrade of domestic enterprise's international competitiveness, introduce of competition mechanisms in monopoly industries, and so on. On the other side, TNCs' M&A practices may bring some potential risks, such as SOEs' losing dominant position in strategic industries, costs of M&A failures, less employment opportunities, risks of embezzlement of stated owned assets, and TNCs' abuse of market power.6. TNCs' M&A practice challenges government's existing regulation framework and brings challenges and opportunities for domestic enterprises. From governmentperspective, better investment environments as well as proper regulations in TNCs' M&A practices are all policy concerns. From enterprises perspective, establishing strategic alliance, fostering core competence are practical choices.