Research On Overseas M & A Target Selection Strategy Of Chinese Enterprises

Chinese enterprises started with overseas Mergers and Acquisitions (M&A) in 1980s, having gone through three major waves, among which the third one was influenced by the global financial crisis. Although many an enterprise suffered from management problems and a fall of asset value due to the global financial crisis, it is thanks to this opportunity that Chinese enterprises showed an increasingly active trend in overseas M&A. On the whole, despite of a rare success of some corporations, there were still lots of companies which failed in M&A owing to lack of experience and mistakes of target selection. Therefore, this thesis aims to provide Chinese enterprises with a strategy instruction in overseas M&A with the help of a target selection system so as to raise the M&A efficiency and success rate. Besides, there is a mixture of research methods applied in the course of study, such as theoretical research, case study, systematic research, as well as qualitative and quantitative study.This paper begins with an analysis of the current situation of overseas M&A of Chinese enterprises and a conclusion of its features, tendency, as well as problems. Afterwards, the thesis analyses the external incentives of overseas M&A of Chinese enterprises and its internal reasons by virtue of a combination of value chain theory and M&A motivation theory, namely M&A motivation, based on value chain, generally come down to efficiency drivers and the economic drivers and in contrast, on the basis of links of value chain, it can be attributed to strategic drivers. Considering that many corporations failed in M&A resulting from improper target selection, this paper offers a further analysis of the characteristics and mistakes of target selection of Chinese enterprises overseas M&A. In order to avoid blindness in target selection and to increase the success rate of M&A, this thesis also supplies a target selection system which acts as a scientific and reasonable guiding ground for the whole target selection process and activity---a clear strategy for enterprise development; draft of target selection principles and plans; searching, selecting and determining of target companies. The system includes strategic analysis methods, target firm evaluating and selecting methods. Additionally, the paper offers some constructive measures of target selection of Chinese enterprise overseas M&A.