Analysis Of Cross-border Merger And Acquisition-From Chinese Enterprises' Perspective

At the beginning of the 1990s, the fifth merger and acquisition wave swept across the world. Under the background of economic globalization, cross-border merger and acquisition (M&A) , which aimed at strengthening market position, reducing cost, enhancing efficiency, optimizing resource allocation, became major form of international capital flow. According to the United Nations Conference on Trade and Development, cross-border M&A has become the major mode of cross-border direct investment. In 2000, cross-border M&A reached climax, with a total volume of $1143.8 billion, accounting for 82% of world cross-border investment. This trend which has lasted for six years reached an unprecedented climax in 2006. Dealogic, a famous financial data provider, disclosed that M&A volume from January to November 2006, mounted to $3 390 billion. This booming situation will continue. This year 44 M&A cases of more than $10 billion took place.Following the trend of going global, many Chinese enterprises adopt cross-border M&A strategy to enter the global arena. Thus Chinese enterprises' cross-border M&A begin to boom. From 1980s to 1990s, Chinese enterprises' cross-border M&A cases increased in number and scale targeting at more countries and areas and involving increasing diversity of sectors and participants.Chinese enterprises' cross-border M&A SWOT analysis can help Chinese enterprises develop better cross-border M&A strategy. The chosen cases of TCL's acquisition of Schneider and Holley Group's acquisition of Philip CDMA mobile phone department verify that private enterprises have become major participants of cross-border M&A. Also the cases can illustrate that apart from the traditional motives to acquire natural resources, circumventing trade barriers and obtaining new technologies have become Chinese enterprise' new considerations to conduct cross-border M&A. Chinese enterprises' cross-border M&A has just on a preliminary stage compared with that of western countries. It is unavoidable that there are problems in Chinese enterprises' cross-border M&A. This paper sums up major problems of Chinese enterprises' cross-border M&A and gives probable Countermeasures to solve them.