Study Of Domestic Companies' Strategy To Deal With Foreign M&A

The M&A of enterprises are the important phenomenon in market economy. Cross-Border Mergers and Acquisitions are the result of globalization and the global strategy of TNCs. Chinese economy will more and more relate to the global economy because of her entry to WTO and the accelerating steps of globalization. Foreign M&A is expected to have a great development in the near future. And it can become one of the important methods besides Greenfield to induct foreign capital. This dissertation is written to help domestic companies to deal with foreign M&A. And at the same time how the government can help domestic companies to deal with foreign M&A is also analyzed, because of the important role of Chinese government in our economy.This dissertation consists of five parts. As preface, chapter one explains the background, and purpose of this dissertation. Chapter two introduces the basic concept of M&A, some important theories and analysis models. These theories use synergy, transaction costs, under valuation, market power to interpret M&A. One of the models introduced here is Boston Consulting Group's analysis matrix. The other is GE's analysis matrix. Chapter three explains how the foreign investors M&A domestic companies. First some industry standards are set to choose suitable object company. Then the 5 M&A trends and in which way that domestic companies are to be merged are discussed. At last the foreign M&A patterns are analyzed. Chapter four deals with the risks that domestic companies may encounter if they are merged. Two important theory defects are mentioned in the dissertation in the first part. Then risk result form evaluation for object company is interpreted. Finally the advantages and disadvantages from foreign M&A that object company may have are discussed. The last chapter advances domestic companies' strategy to deal with foreign M&A. First, some problems of foreign M&A are listed. Second, the attitude that domestic companies should maintain is suggested. Strategies used to counter back M&A are also introduced. At last, some advices are suggested to explain how our government can help domestic companies to deal with foreign M&A.