Analysis On The Motivation And Effect Of Geely Takes Stake In Daimler

Nowadays,under the influence of the economic environment,more and more Chinese companies have set foot abroad considering policy support and the needs of their own development.However,there are many risks in cross-border transactions due to the differences in economy,policies and other aspects between the two countries.Once the transaction fails,it will bring great harm to the enterprise itself.Geely actively pursues an international strategy and is committed to cross-border acquisitions.The successful acquisition of Volvo in 2010 caused an uproar in the market.This article uses Geely’s holding Daimler as a case to analyze.By reading paper to know current academic research on relevant content.Analyzes the causes of the incident,and analyze the impact of the event on the company through financial and non-financial indicators.In addition,Geely adopted a financial derivative tool—collar option in this share acquisition.This article also adds an analysis of the option to discuss the motivation and results of using collar options.Through analysis,it is found that the external environment encourages companies to go abroad.From the perspective of the company itself,Geely conduct the shareholding mainly for strategic purposes.It has achieved synergies as well as improved financial conditions.The use of collar option itself is a roundabout move.But it brings a lot of benefits.Geely used collar options to avoid the early disclosure of information which guarantees the smooth progress of the acquisition.In addition,it successfully evade the risk of stock price fluctuation,and proposed a reference for other enterprises.The development of option in China is relatively short.Most people have misunderstanding about the role of option.I hope that through case analysis,people can correctly understand the effect of option.At the same time,the risk of the option itself cannot be ignored.