Research On Motivation And Performance Of Geely Acquiring Volvo

As a form of enterprises foreign direct investment, Overseas M&A plays animportant role in the globalization of economic activities and a significant impact onthe structure of the countries and the global economy. In this century, with the rapiddevelopment of China’s automobile enterprises, the overseas M&A activities are morefrequent, especially the cross-border M&A boom in the global financial crisis, China’sautomobile enterprises was eager to carry out cross-border M&A events. In these casessome events are success but some are failures. Because of the later development ofcross-border M&A in our auto companies, compared with American and Europeancountries, there is still a large gap. Therefore, it is necessary to study cross-borderM&A activity to help Chinese enterprises properly use M&A theory, betterimplementation of cross-border mergers and acquisitions. The event of Geely HoldingGroup acquired Volvo Car is a microcosm occurred in2010, reflects the risk andproblems in cross-border M&A process, it will provide some useful thoughts andinspiration for Chinese auto enterprises to study this case.Based on the actual process of Geely’s acquisition of Volvo, the thesis analyze themotivation and M&A performance of Geely’s acquisition of Volvo, found the problemfaced by the Geely acquisition, and make some suggestions to improve performance.when conduct performance analysis of the case, using the financial indicators, DuPontanalysis and other quantitative methods and qualitative methods such as comparisonanalysis, according to financial data released by Geely Automobile, it is focused onGeely’s solvency analysis, operational capacity, profitability capacity and otherperformance indicators. Through the above analysis, we found Geely’s financialperformance declined after the merger, the mergers did not bring the expected results.Finally, after the analysis of reasons for the M&A performance decline, somesuggestions are made to improve the performance of Geely, providing a usefulreference for Geely.The thesis is divided into five chapters: the first chapter describes the researchbackground and significance, research ideas, and points out the possible innovationand weakness; the second chapter reviews the concepts of mergers and acquisitions,M&A motivation, M&A performance and etc. It is the theoretical foundation of thecase analyzed below; In Chapter III Geely’s acquisition of Volvo event is described in detail, trying to restore the process of the event; In Chapter IV analyze acquisitionperformance by using financial indicators of Geely and find out the problems of M&Aperformance; In Chapter V find the reasons for the performance decline, a fewsuggestions are made to improve acquisition performance.