Research Questions On Cross-border Mergers And Acquisitions Of Private Enterprises

China’s private enterprises were often referred to as "grassroots enterprises" in the past, because oftheir low visibility, small market share, etc. However, many powerful private enterprises started trying to goabroad in combination with China’s accession to WTO, after China’s Go-out Strategy was enhanced to thenational level. In the meantime, the private enterprises have gradually turned into the backbones of China’seconomic growth by attaining a self-development, expanding the market share, and improving the brandvalue based on the transnational M&A (mergers and acquisitions).Among the private automobile enterprises, Zhejiang Geely Holding Group took the lead in whollyacquiring Sweden’s Volvo influential in the luxury brands of the world. In the integration with Volvo, thesuperior resources and key technologies of Volvo were fully absorbed and utilized by Geely, so that thepurpose of Geely’s transformation was achieved, and also Geely’s brand influence and market share weregreatly improved. This acquisition was greatly controversial among people outside the automobile industry,but exerted a huge influence on all domestic and foreign industries. Simultaneously, a lot of valuableexperience is provided for other private enterprises of China to implement the Go-out Strategy. Therefore,the study and analysis of this case is of very good referential significance to the current transnational M&A.This paper is written based on the domestic and foreign studies of all the theories in the transnationalM&A, in which generalization and summarization, and case analysis methods are mainly used in theresearch. In section1, the methods and writing framework are mentioned from the background andsignificance of the research, and then the research results of the domestic and foreign experts and scholarsin the transnational M&A are reviewed. In section2, the related concepts of the transnational M&A and themain theories of guiding the paper writing are mainly introduced. In section3, the current situation ofChina’s private enterprises as well as the reflected problems are mainly summarized, and also theadvantages and disadvantages of the transnational M&A to enterprise development are analyzed, so that agood foundation is laid for concluding the experience enlightenment from the case. In section4, Geely’sprocess and motivation of acquiring Volvo, the situation and financial analysis before and after theacquisition, the integration after the acquisition, from which the enlightenment in the successful aspects isdrawn. At last, the case about Geely’s Volvo acquisition is concluded, from which the feasible suggestions on the transnational M&A of China’s private enterprises are proposed for facilitating more privateenterprises to implementing the Go-out Strategy, and also reminding them of increasing the importance ofthe brand competitiveness in the implementation of the transnational M&A and the development of theindependent brands. Besides, the innovation point and disadvantages of this paper are revealed. This paperis written mainly for promoting China’s private enterprises to know well the advantages and disadvantagesfrom the transnational M&A, and make scientific transnational M&A decisions and rational planningaccording to the self-condition when they are actively immersed in transnational M&A activities.Ultimately, the success rate of M&A is improved.