Case Study Of Zhongding Shares Of Outward Bound Acquisitions

Since China’s entry into WTO,the wave of economic globalization has driven Chinese companies to increase their direct investment in foreign countries.In 2008,the global financial crisis and the European debt crisis,created good external conditions for Chinese companies to run overseas M&A when some companies from the Europe and United States developed countries had problems with their operations and had to sell assets to improve their cash flow.Moreover,China is currently at a critical moment of transformation and industrial upgrading.All these led to an increase in the number of overseas M&A by Chinese companies in recent years,which both have hit a record high.However,what we must see is that although Chinese companies have already completed many attempts and successfulexperiences on the road of overseas M&A,they still belong to the exploration process as a whole and there are not many success stories in this area.This article will take the successful experience with case study method to analyze a series of overseas M&A of ZhongDing shares(called ZD),an auto parts company.This article first elaborates the related theories of overseas M&A and the types of them.It also outlines the concept of reverse technology spillovers in the theory of foreign investment,and further introduces the principles and models of M&A integration.Then the article analyzes the status quo and problem analysis of China’s auto parts industry,and analyze the reasons why Chinese auto parts companies have to implement overseas M&A strategies through the Porter Five Forces model and then illustrate the internal conditions for them.Next,we will introduce overseas M&A process for ZD shares.We will introduce characteristics of M&A targets from three perspectives of market orientation,technology orientation,and strategic orientation.We will analyze the reasons for the success of ZD shares M&A integration.Compared to the M&A of other companies,we analyze the advantages of ZD shares with reverse investment.Reverse investment is based on the overseas M&A of subsidiaries to reversely invest in China to build factories and expand the Chinese mid-to high-end market for auto parts.It provides an important direction for overseas M&A,and is also implemented by ZD.This integration method does a reason analysis.Reverse investment is not only to strengthen reverse technology spillovers in overseas M&A,but also a new idea for market-oriented overseas M&A.Overseas M&A also increase domestic sales revenue.ZD’s overseas M&A in three phases have achieved significant growth in domestic and foreign market share,and the overseas proportion of total income has been increasing;providing important support for industrial transformation,from traditional cars to new energy vehicles and From product to service to solution transformation;customer base gradually high-end.The reverse investment analysis of M&A has led to an increase in market size and technology upgrading in the main industry through overseas M&A in the auto parts industry chain,achieving leapfrog development.Therefore,it can provide useful inspirations for the selection and integration of overseas M&A targets of Chinese enterprises,especially the successful implementation of the reverse investment strategy,which will provide important case references for Chinese companies in the overseas M&A path.