Cross-border M & A, Effects And Strategies

With the development of the economic internationalization, China will become more open in its policies related to investment, the market allowance and national treatment, which leads to much more opportunities for the foreign companies to enter into the Chinese market by the way of transnational merger and acquisition (M&A). The more and more transnational M&A will replace the former form of foreign investment based on joint venture and co-operation.This thesis focused on the motives of the transnational M&A, among which the economic internationalization and the adjustment of the policies and regulations are the main reasons. Furthermore, in view of the development strategy, and consideration of the research and development(R&D) expenditures, taxes, the exchange rate policy and the trade barriers and so on, the companies are keen on the transnational M&A. At present, more and more multinational companies choose the transnational M&A as the main strategy to enter into the world market and enlarge its competitive advantage.Transnational M&A has many different effects from the "green investment". It will greatly influence the international economy and other aspects. The biggest challenge to China is that we should either benefit from it or avoid the bad effects caused by it.Some strategies to meet the trend of transnational M&A are discussed here. It points out, after China's entry into World Trade Organization (WTO), we should realize the two different effects of the M&A, and foster the relevant market to meet this trend.Having analyzed the features and risks of the transnational M&A, this thesis points out that we should enhance its management and avoid the possible risks caused by it.To carry out "go outward"strategy is the important part of our opening economy and also is the result of our adapting to the world economy. China's entry into WTO also supplies it with beneficial condition. We can adopt either the strategies of anti-M&A or the strategy of alliance to repress the monopoly caused by the M&A.