Research On Wanhua Industrial Group’s Cross-Border M&A And The Synergies

Since China’s accession to WTO in the end of2001, more and more Chinese enterprises carry out overseas investment and take participation in international economic competition and cooperation through cross-border mergers and acquisitions by the influence of globalization. The breakout of the global financial crisis gave Chinese enterprises more opportunities to take the cross-border mergers and acquisitions.In the context of global chemical industry which was influenced by the financial crisis tremendously, faced with the opportunities and challenges of the market environment, Chinese Wanhua industrial group took a successful cross-border M&A on BorsodChem located in Hungary which fell into financial distress due to the global financial crisis. Thus Wanhua achieved the global layout of the manufacture and market and enhanced the international competitiveness. It is of vital significance for us to study the case of cross-border M&A between Wanhua and BorsodChem and its synergies comprehensively and thoroughly. On the one hand, the study can provide experience and guidance on drawing up the tactics, risk aversion, effective integration for obtaining synergies and so on for Chinese enterprises’cross-border M&A. On the other hand, it can enrich and develop the case studies of cross-border M&A and its synergies and provide new thinking and lessons for the scholars.Firstly, the paper introduces the related literature review on cross-border M&A and synergies at home and abroad. In addition, the paper analyzes the classic cross-border M&A theories including M&A theories and the foreign direct investment theories to establish the theoretical foundation for the subsequent analysis. Secondly, the paper explains briefly the definition and the classification of cross-border M&A and the synergies. Furthermore, for the purpose of establishing the basic framework for the subsequent analysis, this chapter explains respectively the concepts of the operating synergy, management synergy and financial synergy and the approaches of achieving them. Then this paper analyzes the overall situation, motivations and risks of Chinese enterprises’cross-border M&A. To combine the theory with the practice, the paper make a comprehensive and detailed analysis on the case of cross-border M&A between Wanhua industrial group and BorsodChem including the background, the course, the motivations and the risks. The next chapter mainly makes a comprehensive and detailed analysis on the integration paths of achieving synergies between Wanhua industrial group and BorsodChem from three aspects including operating synergy, management synergy and financial synergy, combined with the related financial data.The paper argues that the cross-border M&A between Wanhua industrial group and BorsodChem is very successful. In the beginning, the Wanhua industrial group drew up the wise project and firmly held its own strategic direction. In the process, it was able to use various M&A methods, get support of others and effectively avoid the potential risks. The most important is that Wanhua industrial group integrate the resources of marketing, technology, manufacturing, human, finance, etc, and achieved the desired synergies. At last, the paper summarizes the related suggestions respectively from the perspectives of the enterprises and the government hoping to offer the experience reference and guidance for the Chinese enterprises’cross-border M&A in the future.