Research On The M&A Strategy Of China’s Electric Power

The activities of mergers and acquisitions (M&A) have surged up once again in domestic and foreign while the globalization of economy and monetary evolves. The electric power, one of the most significant energies, plays an important role in every country’s politic and economy. It is the basis of economy development and life of the nation. In China, M&A has been on rising trend in recent years, in terms of size and numbers. However, history has seen many failures in M&A, as well as some successful stories in M&A, which all seem to have one thing in common:Treat M&A as the key of business growth. The objective of this study is to provide references and suggestions for China’s electric power companies in their mergers and acquisitions activities. This thesis reviews the M&A basic theories, discusses the situation of China’s electric power industry, and case studies the M&A of Dadu River State Electric Power Corporation.Chapter1:Introduction. This part states the objectives and background of this study, as well as presents the thesis framework, and methods of analysis.Chapter2:Reviews and Theories. This part describes the literature reviews and theoretical framework, sorts some major domestic and international mergers and acquisitions strategies. With the review of five stages of mergers and acquisitions in the history, this study reaches the conclusion and theoretical framework, which is the theoretical basis of case studies of this thesis.Chapter3:Industry overview. M&A is one of the strategic steps for these corporations to grow big and achieve success. It has the same spirit as the business development strategy. To analyze the strategic mergers and acquisitions, we must study the business and industry situations and the external environment, such as market structure and competition. This part introduces the current situation of China’s electric power industry, business and enterprises. It also discusses some M&A cases in the China’s electric power industry in recent years to come to a summary of the development strategy and external environment of M&A for China’s electric power companies in current situation, as well as the objectives and directions for these companies.Chapter4:Case studies. This part analyzes the case of Dadu River State Electric Power Corporation in its acquisition of Sichuan Geshizha Hydro Power Generation Ltd. The discuss focuses on the motivation, capabilities, border, direction, and performance of the entity in this M&A activity. This case shows the importance of applying the M&A theories into its physical M&A activities. The study of this case discovers and analyzes the conflicts between theories and practice in China’s electric power business. It concludes and pointes out the necessary of improving and establishing the M&A regulation and practice in China, to meet its specific political and economical circumstances and needs.Chapter5:Enlightenments from foreign mergers and acquisitions cases. With reference to the development and trend of foreign developed countries’electric power industries, China’s electric power companies should set their goal as to improve the core competitiveness and international competitiveness. By learning from other’s lessons, China’s electric power companies will achieve significant success in their mergers and acquisitions.Chapter6:Summary. This part summarizes the conclusions and Suggestions, as well as the insufficient points in this study and expectation for future study.The research findings of this thesis-Provide a reference for the China’s electric power enterprises to develop strategy in their M&A activities from different dimensions, to reduce the blind acquisition as much as possible.-Reveal the contrary between theory and practice during research of the strategic mergers and acquisitions of China’s electric power business,-Present suggestions for China’s electric power companies on the strategic and theoretical moves in the future mergers and acquisitions activities.-Need to be improved on its academic value due to the complex nature of M&A, and the limited knowledge and experience of the author in both the theory and practice.