Research On Resource Industry Transnational Mergers And Acquisitions Integration

With the economic globalization and the tremendous economic growth in China, more and more Chinese enterprises started the pace of "going out", and participated ininternational competition actively. Cross-border M&A of Resources industry in Chinahas been in a dominant position among all sectors. From2006to2012, China hasaccomplished434cases of transnational mergers and acquisitions in total, the totalamount is up to$114.468billion, and the average deal is$263million. In terms ofindustry distribution of China’s cross-border M&A, resources industry is ranking first as185cases. However, according to a new survey of McKinsey, the success rate of China’stransnational M&A is only33%during the last20years, most of the resource-basedenterprises’ operating situation was undesirable after two years of M&A, one of the mostcommon questions is the failure of integration. Considering the important role ofresources industry in the development of economic and the leading position incross-border M&A in our country, the development of resource-based enterprises overseahas a significant influence on the economic development of our country. So the study ofthe integration issues of resources industry cross-border M&A is very significant, it isessential to put forward reasonable suggestions to the problems.This paper chooses two mineral corporations to make comparative analysis. Thefirst part is the major theory of transnational M&A and the theory of M&A integration.The second part compared the two companies and their respective characteristics in theprocess of mergers and acquisitions. The third part is the comparative analysis of thespecific measures of the integration in terms of the due diligence before M&A, thecultural integration, the human resource integration and the corporate governanceintegration, and then compared the results of the integration, which demonstrates thesignificance of the successful integration to the management of enterprises. Based on theresults and the major theories, the paper makes some recommendations to help improvethe success rate of cross-border M&A of Chinese enterprises.