The Cross Border M & A In Port Industry

This paper studied the cross border M & A in port industry, focusing on the analysis of the motivation and performance. The cross boarder M & A has become the research focus since the early 1990s. The academia has achieved a wealth of research results in cross border M & A's motivation, performance, regulations and effects on the host country macroeconomic and market structure. However, most of previous research ignored the difference among the various industries. In addition to financial sector like banking and insurance, the cross-border M & A activity in other sectors is relatively rare in-depth study. The port industry is a special sector with unique economic characteristics. In recent years, the global port industry has just gone through a cross-border M & A upsurge and China's leading port companies are also being actively mooted and introduced foreign direct investment. Therefore, the in-depth research of the motivation and performance of the cross boarder M & A specified in port industry will not only provide a reference to China port companies but also can verify, add and improve the cross border M & A's theory. This has important practical and theoretical significance.With the comprehensive literature review, this study summarized the research findings and main opinions of the recent study in cross boarder M & A's motivation and performance. We analyzed the shortcomings of existing research and then reviewed the development of cross border M & A process in port industry, analyzed its economic characteristics and summarized the specialties of the port's M & A. This study then can be separated into two main parts-the motivation study and the performance study. In the motivation study part, by combining the common theoretical framework with the characteristics of port industry, we analyzed and explained the reason of the cross border direct investment of port industry (why choosing foreign direct investment), the choice between the green-field project and acquisition of existing projects (why choosing cross border M & A), and the motivation of cross border M & A (Systematically summarized the internal and external factors). In the part of performance study, we used "factor analysis" approach and 61 samples of global M & A cases in port industry to clarify the acquirer's performance change and determine its main factor. We also did classification study focus on acquisition type, the acquirer's country and target enterprises country etc. Based on the research above, we picked three most influential global port operators as typical case study to examine their growth process, the motivation of M & A and performance change. In the final part of this article, we gave the brief introduction of the foreign investment in China's port industry and the "going out" strategy of Chinese Port Company. According to the foregoing conclusions, we made some inspiration finally.This main conclusion are:the economic characteristics of the port industry including:market structure with the main characteristics of oligopolization, discrete change in supply side and continuous change in demand side etc.;Seeking for strategic capital and sustainable growth, adapting for the layout of customers and spreading the risk of single market are the special motivation of cross border M & A in port industry; Cross border M & A is superior to the green land project abroad with right time decision;Different acquirer has different motivations in cross border M & A. The port operators focus their attention on acquiring the core competencies and strategic resource, enhancing the market share, accessing synergies, economies of scale and network economies. Port operators with the background of shipping company focus their attention on Industry vertical integration. Other acquirers need the satisfactory return on investment;We found that the M & A pulls down the acquirer's financial performance in the initial stage. However, after some time's integration, the effect of M & A should be neutral and will not deteriorate the performance of the acquirer over the long term. This is the unique characteristic of port industry;There will be opposite trend between the cross-border and domestic M & A. After the cross border M & A, the acquirer's performance will be improved in the first year but will decline afterwards. The overall effect of cross border M & A should be negative. As for domestic mergers and acquisitions, the acquirer's performance will decline in the first two years, but will improve afterwards and exceed the performance before M & A;As the case study shows, the cross border M & A is the important way to become global port operator. The strategic effect is easy to be achieved for the cross border M & A, but the satisfactory financial performance needs the acquirer to carry out a transaction in a opportune moment and has the ability to integrate with ongoing.