Research On Motivation And Performance Of Listed Companies’ Cross-border M&A In Semiconductor Industry

With the ever-increasing development needs of the enterprises and the promotion of “go global” “bring in” strategies,more and more Chinese enterprises choose to conduct cross-border merging and acquiring,so as to adapt to the rapid pace of global economic development.As one of the ways of Chinese enterprises’ foreign direct investment,cross-border M&A is also an important approach to allocate global resources.The acquirer can integrate resources’ advantages of the two parties in their respective countries or regions,optimize the allocation of resources and improve management efficiency.From 2015 to 2019,Chinese listed companies’ cross-border M&A activity in semiconductor industry remains active.In 2020,under the influences of slowing global economic growth,international trade tensions and strict government’s supervision on technological cross-border M&A,the number and amount of transactions have fallen obviously.Overall,the decision of transnational merger and acquisition made by the enterprise is becoming more rational,most of them aim to acquire foreign advanced high-end technology and other highquality strategic resources,expand the overseas market,etc.It helps enterprises to achieve technological progress,carry out the reasonable business layout,and enlarge international market share.Ultimately,creating value for enterprises.To explore their motivation and the impact of cross-border M&A on enterprises further,studying the transnational M&A of Chinese listed companies in semiconductor industry is of great reference significance to the practice of high-tech enterprises.This paper focuses on cross-border M&A of listed companies in semiconductor industry in China.Firstly,this paper combs the relevant domestic and foreign literatures on the motivations,performances and influencing factors of transnational M&A.Then it summarizes the status and characteristics of transnational M&A of the listed companies,and selects JCET’s acquisition of STATS Chip PAC as the case.Combining with strategic management theory,synergy effects theory and signaling theory,this paper analyzes the motivation of the JCET,studies its performance before and after the cross-border acquisition.Event study method is used to measure the short-term market performance of JCET’s transnational acquisition,using accounting indicators method to investigate the company’s long-term operating performance of cross-border M&A and comparing the accounting indexes before and after the transnational acquisition,in order to analyze the change of operating performance.After analysis,this paper draws some conclusions that JCET’s acquisition is based on strategic motivation and synergy motivation,it has been found that Cumulative Abnormal Return reached at 6.16% within 10 trading days before and after the first announcement,which reflects that the market gave a positive evaluation to the event.Within two years after the acquisition,there is a significant improvement in increase rate of business revenue on account of achieving operating synergy on customer resources and technological resources with STATS Chip PAC.Revenue increase after the acquisition accelerate the turnover of current assets,as both asset size and revenue scale grow to a higher level,there is no obvious change in the total assets turnover during stabilization stage of revenue compared with the pre-acquisition data.However,massive debt burden of STATS Chip PAC and new liabilities generated in transaction,cost increase caused by technology upgrading and STATS Chip PAC’s revenue cannot cover the cost affect debt paying ability,profitability of JCET respectively.They are generally getting weaker in four years after the acquisition.This paper starts from the current situation of listed companies’ cross-border M&A in semiconductor industry,makes a simple statistical analysis of the transactions from 2011 to 2020,and sums up the characteristics of these companies’ transnational M&A.Their primary purposes are that acquire foreign enterprises’ advanced high-end technology and business assets and other high-quality strategic resources,expand the overseas market,etc.And these companies mainly conduct horizontal mergers and acquisitions.According to the conclusions,some practical enlightenments are provided for Chinese high-tech enterprises which are planning to carry out technological transnational M&A in selection of M&A strategy and target company,points to note in M&A transactions and how to integrate resources effectively.