Chinese Commercial Banks’ Cross-Boarder Mergers&Acquisitions’Motivation And Strategic Realization

Since1860’s, global banking industry has undergone three huge tidal wave of multinational mergers and acquisitions, producing a great and profound impact on global economy and finance. And the global financial crisis that broke out in2007has speeded up the integration of global banking industry. Changes in the banking structure of The United States, the developed European countries provide good opportunity to capture overseas market for the banks growing well in emerging region. The commercial bank in China which wants to survive in domestic and international competition and expand the space of profit, should not only rely on their own internal power, but also gradually start to pay attention to and use multinational mergers and acquisitions as an effective method.This paper which based on banks’multinational mergers and acquisitions theory research, with China’s commercial banks’motivation as subject, summarizes three worldwide huge tidal wave of multinational mergers and acquisitions, reviews the multinational mergers and acquisitions’progress of the commercial banks in China, and represents its current situation, characteristics. The view which points out that banks’multinational mergers and acquisitions strategy is decided by internal factors and external influence. The internal factors include chasing profits, reducing cost, scaling, resisting risk and being international. External influence refers to financial globalization and liberalization, diversified management, fierce competition, transitional customers needs, the development of information technology and the global financial crisis. After that, this paper points out that banks’mergers and acquisitions strategy is based on its motivations. Then, this paper runs a detailed analysis to the case on China Merchants Bank acquiring Wing Lung Bank, Hong Kong. And on that basis, this paper concludes that "China Merchants Bank acquiring Wing Lung Bank, Hong Kong is of strategy". There are four reasons that support this view. First, Wing Lung Bank owns international distribution network and cross-border services platform. Second, Wing Lung Bank has good loan quality, strong liquidity and extensive income sources. Third, Wing Lung Bank’s multiple operation experience corresponds with China Merchants Bank ’s transformation direction of strategy. Fourth, acquiring Wing Lung Bank helps China Merchants Bank enhance synergy effect. The motivation that China Merchants Bank mergers Wing Lung Bank can be summarized as follows, playing complementary advantages in domestic and overseas market, with the customer referral sharing, product sales and business linkage cross as the breakthrough, promoting various business cooperation, lowering operating costs, increasing revenue, finally realizing the overall promotion of financial efficiency.After summarizing the case, this paper puts forward some inspiration and suggestions in terms of the commercial banks in China developing multinational mergers and acquisitions strategy that based on different motivations. This paper lists four four multinational mergers and acquisitions strategy in total, including scale economic strategy, diversified business strategy, regional development strategy and the pursuit of cooperative strategy. In addition to establish a clear multinational merger and acquisition strategy, it also need to make talent team that have the concept of international operations, develop effective integration plan, establish overseas brand image actively, construct multinational mergers and acquisitions risk management system. Only in this way can we ensure that multinational mergers and acquisitions strategy be implemented and the multinational mergers and acquisitions target can be realized.