A Study On Cross-Border Mergers And Acquisitions Of China's Large Company

Cross-border mergers & acquisitions (M&A) is a convenient and swift way to acquire market and technology and expand the size of enterprise. With the improvement of enterprises'strength, China's cross-border M&A that is represented by large company has become influential in international investments. In this thesis, China's large companies whose annual revenue is above 500 million Yuan are taken as the research objectives to explain their motivations, strategies and performance of cross-border M&A.In this thesis, it is suggested that China's large companies'motivation of cross-border M&A lies mainly in the interest of shortening the gap between themselves and leading international companies and improving their abilities to participate in international competition. The research starts from the characteristics of China's large company, and then shows the gaps in 4 major aspects, including the size of enterprise, technology, brand and resources, to explore their motivation of cross-border M&A via comparing Chinese enterprises with foreign counterparts. Because of the shortness of the experience about cross-border M&A and the restrictions in domestic policies, China's companies'strategies of cross-border M&A lack variety and agility; however, no matter whether the strategies are employed properly or not, they will directly affect the performance of M&A. So, the strategies of M&A are also summarized in this thesis. The analysis of the performance of cross-border M&A is tested by econometric analysis in which 22 cases of cross-border M&A in the fields of telecommunication, household appliance, machinery, and energy resources are selected as the samples to test the effluence of the dependent variables including the cultural differences, the size of M&A, the scale of enterprise's asset, rights and interests, and industry on the rate of growth in sales. In the results, it is shown that cultural differences have negative correlative relationship with the dependent variable, but the size of M&A has positive correlative relationship. In addition, it is also shown that the cross-border M&A in the three industries of telecommunication, home appliance and machinery generate greater positive effects on the rate of growth in sales than energy resources industry. In the last part of the thesis, the problems in China's large company are analyzed together with their motivations, strategies, performance and the results, and corresponding suggestions are also proposed.