| Cross-border M&A is an important way to achieve the allocation of resources. Economists Chenery have pointed out that the non-equilibrium phenomena of factor markets is very prominent in developing countries, and therefore the resource potential in terms of re-configuration is more important than the developed countries. The rapid development of China’s cross-border mergers and acquisitions marks that Chinese enterprises have stepped onto the world stage. According to the statistics released by PricewaterhouseCoopers, the transaction value of China’s outbound M&A reached US$65.2billion in2012with a growth rate of54%, hitting a record high. In December2012, China National Offshore Oil Corporation acquired the Canadian oil sands operator Nixon Inc. at the price of US$15.1billion, which has become a milestone overseas M&A event. However, there have been controversies for latecomers in emerging markets regarding whether or not these kinds of fast growing overseas mergers would create value. Negative effects have been shown in some unsuccessful cases of overseas mergers by well-known firms. For example, in2004, TCL invested US$560million to restructure the color TV and DVD business units of Thomson SA in France, leading to substantial losses for several consecutive years; in2004, SAIC Motor contributed US$500million to become a holding company of Ssang Yong Motor Company in South Korea, ending in the bankruptcy of Ssang Yong. Cross-border M&A is a carrier which body is business, can adjust resource inventory, optimize the industrial structure, improve the efficiency, promote economic integration, and is an important way to make our economy into a long-term sustainable development track. As a latecomer firms, there is a low degree of industrial concentration of corporate issues, which mostly cross-border mergers and acquisitions are industry investment style; therefore, the value created by cross-border mergers and acquisitions is not very significant. However, there are some companies, although done by industrial investment M&A has created significant value. So, what factors affect the value of cross-border mergers and acquisitions business creation? How it affects the mechanism?There has been a dispute in some academic circles concerning whether or not cross-border M&As can create value for the company. Some scholars believe that cross-border M&As can generate value for both the acquirers and target companies since they can provide integrated interests for internationalization, synergy, and risk diversification (Kang,1993; Gubbi et al.,2010). In contrast, others stress that they will produce negative impacts on M&A companies’values because potential challenges in the M&A course may impede the realization of their original objectives.The history of Chinese enterprises’ Cross-border mergers and acquisitions is only20years, there are few cross-border M&A samples, the existing research on Chinese enterprises overseas mergers and acquisitions’ value creation is fewer, and the only study of value creation in cross-border M&A has some differences on the conclusions.From the existing research base, the majority of the literature focuses on the individual in question, such as performance or performance impact factors, the relative lack of deep integration research, cross-border mergers and acquisitions as a complex investment activities, must have its own evolution and operation mechanism, separate study individual issues is important, but it is easy to overlook the internal investigation of its deep motivation, paths and mechanisms; while existing research are more concerned about the impact on their own or external factors to M&A performance, fewer dig companies internal factors affecting the performance of cross-border mergers mergers and acquisitions, and therefore can not reveal the value creation process and the deep mechanisms.Close attention to the topic of this article forefront of theory and practice, this dissertation use empirical research methods, in order to in-depth analyze China’s cross-border M&A value creation business problems. First, From the perspective of asset-seeking, this dissertation explores the wealth effect of cross-border mergers and acquisitions (M&As) conducted by Chinese enterprises and the relevant factors. It also provides a logical and consistent conclusion. In this dissertation,180M&A cases conducted by listed companies in China between2002and2012are taken as samples, and their wealth effects are examined in the method of event study. Results show that those M&A activities have produced significant positive wealth effects in the event window [-10,10]. Then using regression analysis, key factors that affect wealth effects are studied from four aspects:features of acquiring companies, target companies and host countries, and M&A modes. It turns out that acquiring companies’ strength in R&D and experience in M&A have significant positive impacts on the wealth effect, while their expansion rate, asset scale and ownership concentration have significant negative impacts. In addition, an innovation-oriented and more developed host country helps create positive wealth effects, and vertical M&As are especially favored by the market for they can gain easier access to R&D, marketing channels or mineral resources.Then,This dissertation focuses on value creation of Chinese enterprises’ cross-border mergers and acquisitions issues, constructing a cross-border mergers and acquisitions’ corporate value creation analysis framework mechanism from dynamic capability perspective, which is a perception, acquisition, conversion capabilities as independent variables, R&D intensity of the manipulated variable, asset size, industry concentration, asset type, and M&A experience as a control variable, then has an empirical test. The study found that perception, acquisition, conversion capability has a significant positive effect on cross-border mergers and acquisitions’ value creation, R&D intensity for the conversion of the ability to influence the value creation has a positive regulatory role, industry concentration, asset type, mergers and acquisitions experience also have a significant impact on value creation.Finally, using the grounded theory, through collecting a lot of data about8cross-border mergers and acquisitions’ events of Chinese enterprises, this dissertation build a mechanism for Chinese enterprises cross-border M&A value creation, results show that dynamic capabilities in terms of the cross-border M&A has an important role in the value creation, there are three type dynamic capabilities play important role in the acquisition process, which is perception, acquisition and conversion, they all play a major role in the different stages.This dissertation further explores the similarities and differences between natural resources and strategic assets to get M&A value creation, and found two types of mergers and acquisitions in the perception ability terms there is no discriminatory, but the perception ability company showed is not the same, in terms of access ability, and the introduction of intermediary partners to promote natural resources investment bank easily get access to M&A success and reduce risks of strategic asset type acquisitions’ assets and integration reconstruction, and a variety of payment and financing can reduce the financial pressure of strategic assets acquiring type on M&A in order to contribute to value creation; as to conversion capabilities there are significant differences between two types of cross-border mergers and acquisitions, the resource acquiring enterprise done moderate or high degree of integration in the organizational structure, culture, human resources and supply chain aspects aways form the basis of new resources and achieve value creation, and strategic asset-seeking enterprise done a higher degree of integration in terms of the supply chain, R&D, brand, channel and etc. which usually easily to implement collaborative innovation and updates enterprise resource capacity base thus achieve value creation.This study extends the previous cross-border M&A performance study, it also has important guiding significance for Chinese enterprises’ cross-border mergers and acquisitions mergers and acquisitions practice.First, investors’ positive evaluations of Chinese enterprises’asset-seeking overseas M&As proves the correctness of the "go global" strategy. Chinese enterprises will make great efforts to implement an internationalization strategy, seize opportunities, and acquire target enterprises that have valuable knowledge assets and important natural resources at the proper time in order to overcome their latecomer disadvantages so as to consolidate their foundations of resources and capabilities. Second, Chinese enterprises will enlarge their investments in research and development, promote strategic transformation from an international perspective, and actively make use of overseas resources via cross-border M&As and other methods. This is particularly true for the essential assets held by enterprises located in developed countries in order to accelerate their technological catch-up.Finally, China’s enterprises should continue to accumulate experience in mergers and acquisitions practice, improve their dynamic capabilities, with a keen strategic vision to capture an international cross-border M&A targets and timing, carefully assess the mergers and acquisitions and negotiations in order to create value in the practice of cross-border mergers and acquisitions. |
PDF Full Text Request