Research Of Pe On Cultural Difference Risk And Performance Of Overseas M&A

With the support of the country’s "One Belt and One Road" policy and a favorable economic environment,many Chinese enterprises continue to grow and develop,and actively respond to the national call to start the "going out" global strategic layout.After the world financial crisis in 2008,the economic development of capitalist countries such as Europe and the United States tended to be slow,and enterprises also developed weakly,which provided support conditions for Chinese companies’ overseas mergers and acquisitions.With the increasing number and scale of overseas mergers and acquisitions,there are endless cases of failures.Among them,the risk of cultural differences is an important factor leading to the failure of mergers and acquisitions.In overseas mergers and acquisitions,cultural differences as a hidden risk are easily overlooked by companies,but their impact on merger and acquisition activities is also huge.At the same time,successful overseas mergers and acquisitions are often accompanied by private equity institutions.This article studies the impact of private equity institutions’ participation in overseas mergers and acquisitions on the risk and performance of cultural differences from a case analysis perspective.This article takes the Zoomlion M & A of Italian CIFA company as the research object,and discusses the role of the participation of private equity institutions in reducing the risk of cultural differences and improving the performance of M & A.The main research findings and conclusions are: first,Zhongyi Heavy Industry’s shareholder Hongyi reached a merger and acquisition intention through the negotiation between Goldman Sachs and CIFA’s actual controller Mandalin Fund,which laid the foundation for Zhonglian Heavy Industry’s acquisition of CIFA;second,Hony,Goldman Sachs and Mandalin Fund participated in the Zoomlion merger and acquisition of CIFA,by setting up special institutions to reduce the cultural "cognitive deviation" of foreign companies in our country,and circumvent the legal system constraints;third,Zoomlion Signed an option agreement with Hony Capital,Goldman Sachs and Mandalin Fund to form a "community of interest" and successfully acquired CIFA.After the merger,they also used their professional guidance to eliminate cultural barriers and friendly and mutually beneficial integration with CIFA.Fourth,Zoomlion adopted Hony,Goldman Sachs and Mandalin Fund participated in the merger and acquisition of CIFA,on the basis of reducing risks such as cultural differences,the transaction cost of M & A was reduced,and the long-term performance of M & A was improved.Through an in-depth analysis of the case of Zoomlion’s cross-border M & A,this article puts forward suggestions on how overseas M & A can reduce the risk of cultural differences and improve the effect of M & A,which enriches the theoretical research on overseas M & A of enterprises and has certain practical significance in guiding practice.