| This In today’s post-crisis era, the global economy remains in thedoldrums, the European debt crisis is not finished yet relatively stable and thecontinued appreciation of the RMB, all these factors help Chinese enterprisesto usher in a golden opportunity for overseas mergers and acquisitions.Chinese enterprises also seize the opportunity to actively participate inChina’s overseas mergers and acquisitions amounted to$23.4billion in2012, representing an increase of425%compared to2007. A series of iconicmergers and acquisitions, such as Geely acquisition of Volvo, CNOOCholding Nixon that China’s enterprises are leveraging overseas mergers andacquisitions to accelerate industrial upgrading and transformation to the"internationalization".However, challenges always come with opportunities, if you did notexecute the overseas mergers and acquisitions properly, you may fall into the"trap". SAIC’s acquired of Ssangyong, but deeply struggled with troubles oftrade union and ended with bankruptcy of Ssangyong. Sany heavily blitzedPutzmeister, but have to face the test results for the year would have fallensharply, in the studied overseas mergers and acquisitions of listed companies in China in2009-2012, about65%of the performance of the companydeclined after the transaction. Therefore, how to improve the company’sinternal ability to deal with more and more complex overseas M&Asituation, which required internal mechanisms to be improved and how toperfect for overseas M&A decision-making by establishing a solidfoundation is the question for China’s entrepreneurs need to think over. Thisarticle will work through research and analysis of internal corporategovernance mechanisms on the Performance of overseas M&A cases to tryto give meaningful ideas and proposals. The possible innovation is to thinkabout the latest international M&A cases to learn from famous foreignmergers and acquisitions experience, combined with the current situation andproblems of Chinese enterprises overseas mergers and acquisitions, explorethe international standards of Chinese enterprises to get out of new ideas.With the general emphasis on M&A performance evaluation study, thepaper focuses on China’s internal governance mechanisms impact on theperformance of overseas mergers and acquisitions, trying to explore theimpact of internal factors of Chinese enterprises overseas mergers andacquisitions, to give practical advice and strategies for enterprises to enhancethe level of the internal mechanism.Overseas mergers and acquisitions is a new challenge to Chinese listingcompanies, though transactions in recent years have greatly improved, but thenumber and amount of the proportion of the overall M&A transactions isstill small, domestic enterprises can learn cases and not much experience,especially for China’s overseas M&A Performance Evaluation There are alot of controversy, resulting in many enterprises in overseas mergers andacquisitions or "stepping stones across the river". As trying to become the internationalization of Chinese enterprises, should mature large companiesabroad perspective to the development of multinational enterprises withChinese characteristics, so the study of well-known foreign companiesmaking overseas acquisitions, mergers and acquisitions and cons, to want togo out of our enterprises will be more learning and reference value. HP’sacquisition of Autonomy is the largest M&A scandal in recent years whichis undoubtedly the best case study. Hewlett-Packard as the world’s largesttechnology company, inseparable from the course of its development andgrowth and mergers and acquisitions, successful acquisition of Compaqmaking it the world’s largest manufacturers of computer hardware. But inrecent years, corporate governance chaos, infighting in the Board of Directorsof the Company, CEO of frequent replacement, frequently burst tapping thedoor, peach trading scandal. Followed by a company large sums of mergersand acquisitions often fail to strategic transformation. In2012, the companyannounced the acquisition of Autonomy result in loss of$8.8billion the testagain asked the HP board of directors and corporate governance mechanism,and thought-provoking.This article started from the pros and cons of the merger of HP, the HPmerger performance event analysis method to evaluate, and compare on thesuccess of HP’s acquisition of Compaq HP’s successful acquisition ofCompaq is based on HP’s senior management structure by analyzing theAutonomy case stable, make decisions, give full play to the company’s boardof directors independent judgment, draw on collective wisdom and the failureof the merger and acquisition of Autonomy from the chaos of corporategovernance, the Board and Chief Executive Officer soon after taking officehe was anxious to strategic transformation of large-scale mergers and acquisitions, M&A execution not give full play to the role of independentjudgment and decision-making of the Board of scale, resulting in thecompany ignored the risk of the target company’s financial fraud. Combinedand review the relationship between corporate governance and M&APerformance based on the theory, especially M&A transactions determinesthe requirements for confidentiality of information the Board of Directors ofthe Company as the only decision-making body characteristics, this articlewill focus on research mechanism of the Board of M&A Performance andseparation of the independence of the board of directors, board size, chairmanand president of whether two jobs as well as president of business familiarityfour points as key variables affecting the performance of M&build amultiple regression model. And then through the recent years, China’soverseas M&A transactions of the model test results.The conclusions and recommendations of the independence of the Boardand M&A performance was significantly positively related to theindependence of the Board to improve to help overseas mergers andacquisitions increase in performance. The size of the Board and M&Aperformance also showed a significant positive correlation in Chineseenterprises overseas mergers and acquisitions, the expansion of the Board toenhance the effectiveness of the complex M&A decision-making, which isdifferent from the domestic environment in a relatively familiar M&Atransactions. CEO duality and M&A performance presented significantnegative correlation, indicating that the Board is the less influence corporatedecision-making, M&A performance of the Company will have thepossibility of falling. The president of the company business familiar with theextent and M&A performance showing a non-significant positive correlation In addition, the study also showed that, M&A scale with the M&A performance was a significant negative correlation, which indicates thatChina’s enterprises in the face of bulk overseas M&A transactions of thecomplexity and the control ability needs to be improved, and higher M&Asuccess for some foreign technology for SMEs. Therefore what we can learnfrom the HP corporate governance mechanism is to increase the proportion ofindependent directors of the Board, to expand the size of the board, play apositive impact on the performance of overseas mergers and acquisitions forbeing transformed into a multinational company, and, to some extent,improve the Board influence can help reduce the risk of agency problems inM&A decisions, improve the corporate governance structure, give full playto the role of the Board in overseas M&A decision-making is thecornerstone of the Chinese enterprises to the international road. |
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