TCL Group IPO And Its Acquisition Of TCL Telcom Case Study

Globalization gives Chinese companies a great opportunity. How to compete internationally is a critical issue. For operating globally can expand the market capacity and helps the participants to achieve economy of scale and scope. Capital market plays an important role in globalization. It provides finance flexibility and good liquidity. These are essential for companies to finance themselves to expand their business. TCL Group's IPO no doubt is to strengthen its financial capability to penetrate into the global market. At the same time, TCL Group improved its overall performance through the acquisition of TCL Tel-com. By doing this, TCL Group rebuilt and streamlined its businesses to structure a solid basis for its international operation. This case is a cornerstone in the development of Chinese capital market. It symbolized that the market is accelerating the pace to catch up with the advanced capital market in the world.The designs and the concepts of the transaction already have some characteristics of the advanced capital market, including sound investor relationship, the authority and the market supervision, valuation on market, and minority rights protection. The transaction broke the boundary set by government policy. It brought successful experience in. And it successfully persuaded the stock authority and the market by its business rationale and by following legal requirements. Stock authority plays critical role in the transaction. While stick to the established laws and policies, the authority adopted rational attitude. With the promise of openness, fairness and justice of the market, the authority prompted innovation in capital market. At the same time, local government continues to support the company management to add value to the state-owned assets and quit safely from non-strategic industry. MBO and ESOP in TCL Group are examples that deserve other Chinese companies to study.