Economic Analysis Of Cross-border Mergers And Acquisitions

Cross—border Merger & Acquisition(M&A) ,the abbreviation of Cross-border Merger and Cross —border Acquisition, refers to a kind of investment action, through which the enterprise of one country can control the other country's by means of obtaining part or whole property right of the latter. As a result of the rapid development of market economy and effective measure of enterprise' management, M&A has had a history of over one hundred years in USA and western developed countries, which have seen four times M&A tidal wave. The fifth which occurred at the end of 21c has been lasting up to now. As an investment action, Cross—border M&A brings both benefit and large cost to the company. Especially its character, internationalism, which has the M&A effected by every country's economy, politics, culture and so on, raises the risk greatly. How many good cases are on earth there in all of the M&A deals by now? The result from the demonstration research indicates the rate of failure in Cross-border M&A is very high. So every enterprise in M&A gives its attention to such a problem, which is how to control the risk and enlarge the probability of success of M&A.In this condition, our country has started to notice it. With the developing of our market economy and the deepening of the degree of connection with international society, Cross-border M&A has been a thing which can not be avoided. In fact, more and more Chinese enterprises has been involved in the Cross-border M&A, which makes this study more useful.This paper consists of three parts. The first part introduces the basic questions of Cross-border M&A, and concludes the character of this M&A tidal wave which took place at the end of last century.The second part starts from the basic theory of Cross-border M&A, analyzes its cause and then demonstrates its condition of success and domino effect after merger and acquisition through microeconomics and macroeconomics. This pare is the mainbody of the article which includes the detailed argument about three M&A modes-Horizontal M&A, Vertical M&A and Conglomerate M&A.The last part describes our Cross-border M&A tidal wave in a simple way, then puts forward some suggestions.