Research On Influence Factors For Cross-border M&A Of Chinese Enterprises

With the economic globalization and the rapid development of worldwide high-tech in recent years, Chinese corporations have been seeing mergers and acquisitions wave after wave, among which the most striking one is the cross-border M&A of Chinese corporations.This paper chooses the mineral resources corporation as a starting point, which has long been playing a leading role in the cross-border M&A in China. Then the paper indicates the phenomenon of low success rate in cross-border M&A of Chinese enterprises. The main content of this paper is to seek the influence factors for this phenomenon. After an overview of the theories of cross-border M&A, the paper selects a successful cross-border M&A case to analyze--the M&A between China Minmetals Corporation and Australia OZ Minerals. The paper divides the influence factors into two processes, the process of cross-border M&A transaction and the process of post-transaction M&A integration. Then according to the analysis, the paper draws some conclusions in the last part and makes some recommendations to help improve the success rate of cross-border M&A of Chinese enterprises.Through the analysis of the case study and the relative theories, this article draws the following conclusions:(1)The factors affecting the success or failure of cross-border M&A of Chinese enterprises can be divided into two parts:factors in the cross-border M&A transactions and factors in post-transaction M&A integration.(2)In the cross-border M&A transactions reached process, the influence factors include the macro factors and micro ones:The macro factors mainly concern about the political environment, macroeconomic and laws and regulations. Political environment has something to do with the nature of Chinese enterprises, non-governmental forces of the target country and economic nationalism; Macroeconomic factors mainly mean the worldwide financial crisis and the economic situation in China. China has sufficient foreign exchange reserves, a sound financial system and ample liquidity; Laws and regulations factors ranges from domestic aspects and foreign aspects. The micro factors can be divided into three areas, the development strategy of the company, the valuation of the target company and the M&A program which contains the purchase price, the size of the M&A and the arrangement of the target company’s employees.(3)In the post-transaction integration phase, the paper elaborates the enterprise development strategy integration, finance integration, human resources integration and cultural integration. And among this four integrations, the cultural integration of the post-transaction M&A is critical to achieving the success of the cross-border M&A for Chinese enterprises, for most enterprises in China can not overcome the culture conflict between the East and the West.