Cross-border M&a Synergy Effect Research

Merger and Acquisition, by nature, is the dealing action under market mechanism, whichtarget to acquire the control power of other enterprise. As the product of market economydevelopment, merger and acquisition has become one of the important economic phenomenain western development countries. In the high economic development countries, more andmore enterprises depend on merger and acquisition to expend business, centralize capital andfulfill the target for external growth.Along with the accession of China’s WTO, the competition among enterprises will becomeintensive increasingly. The entrance of monopoly industries, i.e., telecommunication, civilaviation, railway and electric power, etc., will be gradually relaxed. In the face of challenge ofcross-border companies, quite a number of companies will be taken over by domestic andforeign rivals sooner or later. At the same time, domestic enterprises, especially theseprominent ones also take part in cross border merger and acquisition. Cross border merger andacquisition has become one of the important methods for them to expand foreign markets.However, our enterprises’ merger and acquisition is still at the prime stage. Distinguishing，pursuing and fulfilling synergy effect will have theory and practice meanings for domesticenterprises’ cross border merger and acquisitions.Under the background and facts, this thesis packs up and sums up the correlated theoriesfirstly. Based on the foundation above, synergy effect could be reduced to substitute effect,complement effect and promotion effect. Then, according to the processing of historical data,this thesis analyze the two waves of Cross-Border Merger and Acquisition of Auto Industry inthe history and special behaviors which including operation, management, finance andimmaterial assets. In the following sections, this thesis analyzes the rootstocks about Mergerand Acquisition between Daimler and Chrysler. The collision of the management style,disagreement between operation methods, mismatching in finance coordination and cultureshocks are the main reasons which resulted in failures of this hopeful ‘Cross-Border Marriage’.In the contrast with Daimler and Chrysler’s case, SAIC take the soft methods to deal withSsangyong Motor and get the favorable synergy effect. These methods resulted in theconsistency in management, operation and finance, although SAIC met some conflicts in thebeginning of the Merger. Although, it is a pity that Ssangyong Motor is in the hot water due toforce majeure of global recession, SAIC’s efforts should not be denied. In the last parts,integrating the real situations in our country, we will put forward our suggestion about China’sauto industry development. Our Auto Industry should be developed under the leadership ofindustry management and industry association, according to the Plans for the Development ofTen Major Industries, insisting on ‘Self Creation’ and ‘Industry Upgrade’. Trough industryrecomposing and new energy sources development, kernel enterprise would bring scaleadvantage into play, which will make our Auto Industry hold core technology and catch on theadvanced level on new energy source flat roof.