Research On Cross-border M&A Performance Of Geely’s Acquisition Of Proton

The deepening of economic globalization has given chances to enterprises of various countries.Enterprises can not only enter the domestic market,also can develop international market.At the same time,the process of internationalization also puts challenges to the enterprises of all countries.In order to enter a new markets,gain the required resources and strikingly promote the global competitiveness of enterprises,the enterprises of all countries switch their goals to the international market,and transnational M&A has become an extremely essential mean for enterprises to get into international market.Thanks for the reform and opening up,China has,by degrees,became into the world’s largest developing country and one of the world’s largest investment aboard countries.The "one belt,one road" initiative has not only provided a wide choice for China’s enterprises to invest in Eurasia,but also provided great opportunities for Chinese enterprises to implement cross-border mergers and acquisitions.This paper taking Geely’s acquisition of proton as the main case,focuses on the performance of Geely’s cross-border M&A.The case is a cross-border M&A in the automotive industry in June 2017.Geely Automobile is the leading enterprise of private automobile enterprises in China,while the acquired company is proton automobile,the national brand of Malaysia.For a long time,Chinese enterprises usually exchange capital for overseas cutting-edge technology and management concepts.However,the role of Chinese enterprises in this acquisition has changed.Geely not only exports capital,but also exports technology for market.Therefore,it is of great significance to study its M & a motivation and analyze its M & a performance.Based on the theory of M & A,this paper reviews the case process and analyzes the motivation of Geely’s M & A of proton.In the aspect of M & a performance analysis,it is mainly divided into three dimensions.Firstly,this paper uses Du Pont analysis method to analyze Geely’s financial performance from 2014 to 2019;secondly,this paper mainly analyzes Geely’s financial performance through EVA index,so as to further improve the capital cost factor lacking in traditional financial index evaluation;thirdly,on the basis of analyzing Geely’s M & a performance by using the former two financial indexes,this paper analyzes Geely’s market reaction to its M & A of proton,As well as Geely’s merger and acquisition,this paper analyzes its market development prospects,and tries to get the comprehensive evaluation results of Geely’s merger and acquisition performance of proton.The conclusion of this paper shows that: first,Geely’s acquisition of proton has a good market response,which brings short-term wealth increase for shareholders.Second,Geely’s acquisition of proton has not significantly improved its financial performance.Third,Geely’s acquisition of proton failed to cause Geely’s EVA growth from 2017 to 2019.Compared with Geely’s EVA and net profit,Geely started its merger and acquisition activities in 2016 and completed the merger and acquisition in 2017,and the EVA index declined,but it rebounded again from 2018 to 2019,but it was caused by the rebound of market.Although the net profit of Geely Group before the merger and acquisition is rising,and the decline is obvious in 2018 after the merger and acquisition,through comparison,it is found that Geely’s EVA is greater than its net profit at the same time.Therefore,based on the above conclusion,the author finds that the M&A is not a successful one.