Nestle Analysis And Cross-border Mergers And Acquisitions Experience Enlightenment Enterprises

According to the research of Zero2IPO, China cross-border M&A transactions amounted to29.8billion in2012. After “China manufacturing” successfully embedded itself in theglobal production chain,"China capital" has also begun to play an increasingly importantpart in the international resources allocation and the international division of labor. AsChinese enterprises constantly enhance its status and influence in international directinvestment, unsuccessful cases of cross-border M&A also increase. The failure rate ofChinese enterprises’ cross-border M&A in2010is as high as11%. Companies whichsuccessfully conducted cross-border merger and acquisitions are still faced with problemsof post-merger integration and management. Whether the overall performance of thecompany can be upgraded after the merger and acquisition remains to be proven. We can’tdeny that China is still in the initial stage of transnational merger and acquisition, it lagsbehind in financial, technical, managerial and many other aspects when compared withdevelopped countries. So it is quite common for Chinese enterprises to encounter variouskinds of problems during the M&A process. As the biggest food maker all around theworld, Nestle has undertaken over one hundred cross-border M&A transactions since itwas founded in1867. More than half of the company’s brands are obtained throughmergers and acquisitions. It can be viewed as the ancestor in the field of cross-borderM&A area. This paper is based on the background of Nestle’s cross-border merger andacquisition history, combining the methods of literature review, theoretical research andcase analysis, comparative analysis, probing into the reasons for Nestle’s successfulmergers and acquisitions, looking for the necessary conditions for a successfulcross-border M&A. By comparing Chinese enterprises with Nestle, this paper tries to findout the problems exist in China’s cross-border M&A, and to give some suggestions on howto improve. Proposals include: set a clear-cut strategic goal before the merger andacquisition, make necessary adjustments to the management mode, strengthen theintegration of company culture, focus on the integration of human resource and personneltraining, actively implement the localization strategy, pay more attention to scientificresearch and technology innovation, etc. These successful experiences can be applied tothe practice of Chinese enterprises’ transnational merger and acquisition, and help toreduce the risk and increase the success rate of China cross-border merger and acquisition.