Research On The Impact Of Geely’s Acquisition Of Volvo On The Value Of Parent Company

Automobile industry in China dates back to the 1950 s,which boomed rapidly afterwards and reached the peak of its development in 2009.It ranked from both the figures of sales and production all around the world.As the competition in the automobile market becomes more and more intense,mergers and acquisitions in the industry become more common.Cross-border mergers and acquisitions are regarded as the main orientation in China,but related statistical data show that the success rate of cross-border in China is only 30%,while in most cases,Geely M&A Volvo is comparatively successful,which has a certain study value.The article is meant to make a study the influence of the value improvement of Geely M&A Volvo,which explains the whole situation of Geely M&A Volvo mainly from the perspectives of M&A background,M&A motivation and progress,and also from the following three perspectives.This article makes an analysis of Geely M&A Volvo value improvement for its parent firm.First,short-term value improvement;Second,long-term value improvement;Third,social value improvement.Through the analysis of the above three perspectives,it is concluded that Geely’s acquisition of Volvo is mainly manifested as :(1)the non-increasing profitability;(2)the reduced operating efficiency;(3)the increasing debt service pressure;(4)the enhanced production capacity;(5)the promotion of marketing ability;(6)the improved capability of the technological innovation;(7)the improved brand status and market share;(8)the driving of the development of automobile related to industries;(9)the increasing social employment rate.Finally,the paper gives a practical and effective solution to the above problems.It is hoped that it can offer constructive Suggestions to the enterprises in the future.According to the above questions,this article makes practical solutions.I hope it can offer constructive advice to carry on with cross-border M&A in a planned way.