The Research On Cross-border Merger & Acquisitions Of Chinese Resource-based Enterprises

From the year of 2000, cross border M&A accounts for 80% of the global direct investment, becoming the main way of international direct investment. Because of the speed advantage compared with Greenfield investment, cross border M&A can obtain the strategic resources, technology and market from the host country quickly. Chinese enterprises are among the latecomers in cross border M&A, while Chinese resource-based enterprises are in front row of Chinese enterprises oversea expansion for the need of state strategy and enterprise development. In the past ten years, the success and failure of cross border M&A in Chinese resource-based enterprises can provide valued experience and lesson for the latecomersThis paper firstly makes a summery of the theory concerned on cross border M&A, and presents different opinions from different economics schools, showing the research fruits on international investment and cross border M&A from economists of different periods in an all-round way. Next the paper makes analysis on the causes of cross border M&A based on international production theory from Dunning, and states the advantages of ownership (O), location (L), internalization (I), then introduces and adds transaction integration advantage and speed advantage from other experts'views into OLI model, forming a 3D expanded OLI model. With the expanded OLI model, this paper tries to analyze the causes of the success of cross border M&A between Petro China and PK Company as well as the failure of cross border M&A between Aluminum Corp of China and Rio Tinto Group respectively, in the way of five factors in the model, and then generally summarizes the roles of different factor advantage in cross border M&A of Chinese resource-based enterprises, and come up with the current questions in front of them. The paper believes that if the enterprise has the five factor advantages of ownership, location, internalization, transaction integration, and speed to start its oversea expansion, thus it could keep its advantages in cross border M&A and make final success to keep a steady growth in the business. Finally, the paper provides related policy advises from the aspects of enterprise level and macro level...