The Research Of Firm’s Cross-regional Mergers And Acquisitions

In the previous period of The Tenth Five Year Plan, cement was extensively demanded in the Southeast of China, due to the influence of the fixed asset investments, particularly the real estate investments. However, the dual factors that the blind expansion of cement’s capacity and a slowdown in economic growth gave rise to the phenomenon of overcapacity to different degrees in different provinces of the Southeast China. At the same time, the concentration degree of cement industry was very low in that area so that the excessive fragmented industry was sinking into the mire of vicious competition. Naturally,"Zhejiang phenomenon" appeared. Southern Cement, founded in2007, entered southeast of China to integrate the cement industry based on the core of Zhejiang. This article tries to prove the rationality of the mode of the integration of Southern Cement, and provides the suggestions for other similar enterprises if they want to integrate regional cement industry.The thesis is organized as the follows. In the first chapter the thesis introduces the background and significance of the subject, etc. The second chapter gives a general introduction of theories of Company Geography, Regional economics and the related Mergers and Acquisitions. In the third chapter, the process of its cross-regional expansion is presented. In the fourth chapter, the process is interpreted with the theory of cross-regional expansion. The fifth chapter introduces the effect of regional mergers and acquisitions. Conclusions and suggestions are given in the last chapter.Two conclusions are drawn after the research:Firstly, Southern Cement achieves the purpose of effectively controlling the production and market of regional cement industry by means of mergers and acquisitions of regional cement firms and increases its capital’s efficiency. Its behavior of cross-regional mergers and acquisitions is in accordance with basic principles of theories of Company Geography and is considered to be a successful example of mergers and acquisitions.Secondly, in the situation of regional excess capacity of cement industry, stage-owned enterprises’mergers and acquisitions regulate the development of regional cement industry, optimize the structure and improve its efficiency. At the same time, Southern Cement’s cross-regional expansion in the form of mergers and acquisitions avoids cement firms being merged by foreign companies, so that the autonomy and stability of cement industry is greatly improved.