The Research On Foreign M&A Of Chinese Enterprises

Since the 1990s, the globalization of the world economy has propelled the markets of different countries to open further. As a result, transnational mergers and acquisitions (M&A) has become the dominant means of foreign direct investment (FDI). In recent years, the volume of global M&A has dropped a little. But in the long run, transnational M&A will develop rapidly. As one of the most dynamic countries in the world, China has become one of the top home countries with regard to the scale and volume of FDI inflow. With China's entry into the WTO, Chinese market with large volume and potential has become more attractive to multinational enterprises (MNEs). MNEs are taking new strategies in Chinese market and foreign companies are hastening the process of M&A. Our government is taking positive attitude toward M&A. Based on several positive factors, China must become one of the most potential M&A markets in the world. Foreign M&A of domestic enterprises means both opportunities and challenges. It is very significant to lead and utilize foreign investors' M&A in our country. The purpose of this thesis is to analyze the causes, impacts and traits of foreign investors' M&A in our country and give some suggestions related to our policies.There are five chapters in this paper.The first chapter depicts the current situation and trend of transnational M&A. In today's highly integrated world, we can't discuss foreign investors' M&A of domestic enterprises without considering the background of global M&A.The second chapter summarizes the representative theories related to the motives of transnational M&A. Aside from these theories, this chapter also deeply analyzes the actual reasons and prerequisites of foreign investors' M&A of domestic enterprises in China.The third chapter focuses on the impacts of foreign investors' M&A of domestic enterprises in our country from both positive and negative point of view. The positive impacts can be explained in macro and micro aspects. From the macro aspect, M&A can propel the development of technology, the accumulation of capital, the adjustment of industrial structure, the reform and development of capital market and the development of the western and northeast regions. From the micro aspect, M&A can prompt the innovation of corporate mechanism and the development of corporate core competence. Transnational M&A could also bring about some negative impacts such as monopoly of the Chinese market, the marginalization of local enterprises and theimbalance of regional development.The fourth chapter analyzes the traits of foreign investors' M&A of domestic enterprises in China including the industrial distribution, the methods and the regional distribution by collecting some typical cases of M&A.The fifth chapter sums up the specific policies for our country to deal with transnational M&A effectively. On one hand, we should speed up the reform and development to correctly make use of foreign investment. On the other hand, we should develop our own enterprises to face the intense international competition and encourage these local enterprises to "go abroad".