Cross-Border M&As By Chinese Firms: An Empirical Analysis Of Strategic Motives And Performance

Having adopted export and foreign investment oriented-foreign cooperation modes for long, China's opening to the outside world is entering a new stage-a new round of capital outflow is becoming the focus of foreign cooperation, which is characterized by cross-border M&A. How to control risk and improve the performances in the cross-border M&A activities is an important research topic.This paper is divided into six chapters. Chapter One is the definitionpreparation, which explains the major concepts frequently used in this paper,including the concepts of cross-border M&A, FDI, etc. Chapter Two reviews sometheories about cross-border M&A. In Chapter Three the paper reviews the history and current situation of cross-border M&A in the world and in China. Chapter Four considers the strategic motivation of Chinese cross-border M&A activities of 98 deals conducted by 58 Chinese firms that took place during 1984-2008. The study finds that cross-border M&As by Chinese firms are primarily motivated by market development to enable faster entry into new markets, promote diversification, and introduction of foreign advanced technology and other resources. In terms of the subjects in M&A practice, the majority M&As are conducted by state-owned enterprises; In terms of industry distribution, the majority of cross-border mergers and acquisitions are resources-oriented and efficiency-oriented; From the regional distribution, regional distribution and industry are very closely integrated. In Chapter Five the paper makes a statistic compare of operation achievements before and after mergers and acquisitions of Chinese enterprises in order to get positive results. Chapter six gives some strategy suggestions on cross-border M&A to Chinese enterprises and Chinese government.