The Study Of Rong’s Enterprise Merger & Acquisition Strategy

Rong’s enterprise group is a typical representative of modern Chinese private enterprise and plays an important role in China’s modern industrialization. Rong’s enterprise group was established by the brothers of Rong Desheng and Rong Zongjing at the end of 19th century. Rong’s enterprise group consists of Mao Xin, Fu Xin flour factory and Shen Xin textile company. Rong’s enterprise Group ranked first both in modern Chinese flour and cotton two large industries and the brothers were called "Flour King" and "Cotton King" by people in Chinese modern history.Rong’s enterprise group is the largest national capital enterprise group, has always been the focus of study on the history of Chinese enterprises. However, studying the history of domestic enterprises, the Merger & Acquisition research of the development of the Rong’s enterprise group is relatively rare. During the expansion of Rong’s enterprise group, large-scale mergers and acquisitions are the most distinctive features in Rong’s enterprise group’s development process and this is an important reason for Rong’s enterprise group’s rapid development into China’s No.l national capital enterprise group. Merger & Acquisition is a shortcut for company development and growth. It was by virtue of this large-scale mergers and acquisitions to expand that Rong’s enterprise group owned half of Chinese flour and textile industry in the peak period, and "Flour King" and "Cotton King" crowns seemed real to be deserved by the brothers.Applying Merger & Acquisition theory, trying to use the theory of competitive advantage in the field of economics and strategic management theory in the field of management science, this article focuses on the study of mergers and acquisitions in the Rong’s enterprise group development and studies the large-scale mergers and acquisitions activities from 1920s to 1930s. At the beginning, this paper reviews the process, of Rong’s enterprise group’s development, and finds out the large-scale acquisition process embodied three characteristic factors (causes, ways and funds). Finally, the author use the theory of competitive advantage and strategic management theory to analyze the Rong’s enterprise group’s acquisition strategy.