Case Analysis On China HT Group Corporation Cross-border M&A To Oerlikon’s Carding Business Department

In the process of economic globalization,increasing firms are focusing on international market.Therefore,a growing number of firms take their roads to international.China’s manufacturing industry is at a critical stage of transformation and upgrading,and the firms merging cross-border can obtain both advanced technology and managerial experience which are crucial to the industry upgrading.With the accede to WTO and policy about foreign capital relaxed,Chinese M&A transactions frequently happens.Due to the late start of cross-border M&A in China,there is still a certain gap between China and Western countries in terms of the theory and operation.In view of this,using the research method combined of theoretical studies and actual case analysis,this paper takes company China HT Group Corporation and studies the process of cross-border M&A in the textile machinery industry.First of all,this paper presents a case study of HT Group’s overseas acquisition of Oerlikon Carding Division,and mainly studies the preparation,operation and integration of M&A cases.Through the analysis of the three parts,it points out the success and shortcomings of HT Group’s cross-border M&A activities.M&A preparation is the preliminary work of M&A activities,including motivation analysis,due diligence and risk analysis.HT Group’s M&A incentives include the macro-driven environment caused by the external environment and the micro-demand of the company itself;due diligence not only determines whether the HT Group’s choice of the target company is correct,but also the risks brought about by the M&A activity;the risk analysis sort out the risks identified by the due diligence and provide a risk plan.M&A operations include substantial operations and capital operations.The part of substantial operations details the main body,methods,and schedules of M&A activities.The part of capital operations examines the process of how the capital departs and obtains ultimate control of the target company in the case.M&A integration involves the adjustment of corporate governance,organizational structure and product business after the merger.The adjustment of the organizational structure of the new company is the focus of M&A integration.This paper uses the evolutionary game model to demonstrate the rationality of organizational structure integration.In the cross-border M&A process,clearing motivation and target enterprise indicate the direction for the acquirer.Detailed due diligence and the rational design of procedure ensure the completion of delivery.The effective integration ensures the ultimately succeeded.Secondly,by way of exhibiting the M&A process,the pivot of cross-border M&A for textile machinery enterprise is disclosed and set out.This paper provides cross-border M&A optimization solution to Chinese textile machinery enterprise,which includes creating due diligence team and M&A process design team,building Country Risk Index System and professional manager database.Building Country Risk Index System supposes to guard against the risks originating from the changes political and economic circumstances of the host country.Creating due diligence team is able to prevent post-M&A operational risks via reducing information asymmetry.Establishing M&A process design team can reduce both time costs and investment risks,by which M&A can be efficiently implemented.Establishing a professional manager database can provide options for the parent company to select and appoint executives for the subsidiary.Finally,based on the research results,this paper gives policy recommendations on how to promote cross-border mergers and acquisitions of Chinese textile machinery enterprises.The government should improve cross-border M&A laws,establish a good overseas M&A environment for enterprises and actively guide enterprises to go out;industry associations should provide guidance on cross-border M&A of textile machinery enterprises and strengthen contact with textile machinery associations in other countries;enterprises themselves should pay attention to cross-border M&A activities and deal with issues such as labor relations,public relations,and trade unions.