Integration Risk In Overseas M&A Of China

In recent years, overseas M&A has become a regular choice for Chinese companies to expand in global market. However, the ratio of failure in overseas M&A of China is very high because of the integration risk. Based on resource similarity and complementarity, this paper has studied the integration risk in overseas M&A of China. In theoretical part, by reading literature and studying overseas M&A cases of China, this paper discusses how each core resource affect the the integration risk on the view of similarity and complementarity and proposes6hypothesises, In empirical part, with the help of SIC codes, number of patents and culture distance, business resource, technology reseource, culture resource and marketing resource between acquiring and acquired companies have been analyzed quantitatively. And then, this paper test hypothesises between resources and integration by multiple linear regression model. Besides, this paper analyzes a typical overseas M&A case to show how the similarity and complementarity of resource has an influence on integration risk in real business. After all these, this paper comes to a conclusion about how to control integration risk based on resource similarity and complementarity.Our study shows that by influencing the synergy effect and friction effect during integration, the similarity and complementarity of resource adjust the integration risk and integration value, In general, the similarity and complementarity of business resource has a huge effect on reducing integration risk. The similarity and complementarity of technology resource also help to reduce integration risk, as well as the complementarity of market resource. But we have not found a significant result between culture resource and integration risk. After the theoretical discussion, empirical study and case study, this paper gives advice about integration risk control in overseas M&A of China.