Study On Influential Factors Of China’s Successful Cross-border

It has been six years since the08’s financial crisis happened, and the world’s economy grows in a low speed. Every country’s economy is facing both challenge and opportunity with the complicated and profound shift taken place among economic powers. The world’s economy lacks momentum, and slow-growth will be a normal state. New risks caused by America’s exit from the Quantitative Easing Monetary Policy, has brought more challenge to the emerging economies, reduced the increase of world trade and transnational investment, and made the world’s economy recovery lack driving forces. In conclusion, the world’s economy is in slow-growth and unsteady. Even though, the amount and scale of Chinese enterprises’ cross-border mergers and acquisitions have been growing rapidly. From2009to2012, the amount has been lifted up from166to188, and the transaction amount grows from33.5billion dollars to38billion dollars. As to2012, the total amount of Chinese enterprises’ cross-border merger and acquisition is up to191, even though comparatively lower than206in2011, the total amount of transaction is an all-time high. From42.4billion dollars in2011to65.2billion dollars in2012, the annual increase is54%, this shows that the market of Chinese enterprises’ merger and acquisition has met up with a new time window.Among which, Chinese dairy enterprises as new members of cross-border merger and acquisition forces have aroused extensive attention. In July18th,2010, Guangming dairy subscribed26million newly increased common shares of Synlait Milk, a Zelanian dairy company, in the form of additional share, and obtained51%of this company’s stock equity, which has become the first cross-border deal made by domestic dairy enterprises. Afterwards, under the support of national policies, a series of Chinese dairy enterprises march towards the overseas market. In drive of expanding overseas market, searching for high-quality milk sources, and developing high-end brand, Wahaha Group declared the cooperation with a Dutch contract manufacturing factory and marched into the dairy market. Aoyou dairy merged with Hyproca to enhance the upstream industry chain. New Hope Group successfully merged with PGG Wrightson, the second largest agricultural listed company of New Zealand, to expand its grass seed business.But compared with energy and manufacturing industries who have been practicing mergers and acquisitions for more than10years, China’s dairy industry can only be counted as an novice, not only weak in amount, but also in success rate. In addition, most mergers failed at the beginning, that is the merger transactions have never been concluded. Take Guangming dairy as an instance,4out of its7cross-border mergers have failed due to the incompletion of merger transaction. Failure is always related with the self-image of the enterprise, its motivation of merger, strategic goals and targeted enterprises.Therefore if China’s dairy enterprises expect to go further in the area of cross-border merger and acquisition, obtaining the success of early stage merger transaction is vital. And to achieve that goal, the enterprise needs to do some preparatory work--clearly define its self-position and strategic goals, cautiously choose targeted enterprise, sufficiently investigate the finance condition, development path and all kinds of information about the target enterprises. To sum up, being able to know yourself and your enemy.However nowadays, studies concerning with such failed merger transaction are not sufficient, so in this research, I will analyze the failure of China’s dairy enterprises’ cross-border merger and acquisition, and providing advice. The analysis will be performed from multiple perspectives like strategic goals, merger motivation, goal selection, system background, industry features and so on.This research includes six sections in total:Section One is introduction, which covers this research’s background and current situation, significance, goal and method. It will also illustrate the approach and frame of this research as well as the main contribution and deficiency.Section Two is relative theories, which covers the definition of relative concepts, elaboration of cross-border merger’s connotation, denotation, function, operation mechanism, theoretical foundation, evaluation criterion and other relative factors, so as to provide theoretical reference for case studies. It’ll also cover the generalization of relative literatures written by experts home and abroad in relative fields, concerning the appearance, procedures, stages, target enterprises selection and influential factors of China’s cross-border merger.Section Three is about the current situation of China’s dairy enterprises’ merger and acquisition. An introduction of the current situation of Chinese enterprises and cross-border merger and acquisition.Section Four and Six are case studies. I looked up public announcements and relative news reports of Guangming Group and its subsidairy listed corporations, studied the background of Guangming Group, and using the procedures of cross-border merger as links, analyzed the common and individual reasons of Guangming Group’s four failed cases.Section Seven is conclusions and suggestions. This section covers the conclusion of this research, and provides relative as well as up-to-date advices in perspectives of political system, cultural differences, economic and trade relations, industry status and sensitive, corporation ownership, cross-border merger experience, human resource management, communication, consultant team and strategic goal.