Study Of Chinese Automotive Component Enterprise Overseas M&A Integration

With the acceleration of economic globalization and the continuous deepening of China’s reform and opening up,overseas M&A has become an effective strategy for Chinese enterprises to go abroad,obtain advanced productivity from the same industry or even cross industry and open up their own new development situation.Over the years,people have done a lot of research on M&A activities,and the research on cross-border M&A is more and more common.Early studies focused on the decision-making stage and the implementation stage of M&A.After the 1990 s,more and more researchers began to pay attention to the post-M&A integration stage.And the research content and research angle are varying.Some scholars study integration from the perspective of value-creation,some from the problems encountered in integration,some from the strategic motivation and purpose of M&A as the starting point,and some research is around the mode of M&A integration.This paper briefly describes the concept and historical development of M&A from the theoretical point of view,introduces several main integration methods,and quotes several mainstream integration theories.The risks that several integration methods will face and the possible adverse consequences will be explained and revealed.In terms of integration performance,Chinese enterprises do not pay enough attention to M&A integration and lack of experience and capability in M&A integration management.Therefore,they are not able to evaluate the integration performance in a timely and accurate manner.In many cases,they are unable to effectively monitor the integration process and adjust the integration measures in a timely manner.This study uses the financial index method to study the performance of M&A integration,mainly because the financial data of this research method is easy to obtain,the research ideas are easy to understand and reference,which has strong practical value in practice.According to the characteristics of the industry,Du Pont financial analysis model is selected as the research tool to decompose the financial indicators into the corresponding integration methods,and evaluate the performance of M&A integration.In this paper,case study method is used,from the motivation and decision-making of M&A,the process of M&A implementation,the integration after M&A,and the performance evaluation after M&A,and with the integration after M&A and performance evaluation as the focus,case analysis is adopted to demonstrate how various integration methods affect the performance of overseas M&A.This paper selects the automobile industry which can best represent the industrial development level of a country,and focuses on the auto components industry which is a crucial part of the auto industry.It takes AVIC Industry’s overseas acquisition of the N company,which is a typical and well-known case in the industry,as an example to conduct in-depth research.Read the 2010-2018 public financial report of N company carefully and analyze it with Du Pont Model.And the integration performance of various integration methods utilized is evaluated through the trend of various financial indicators in this time range.While summarizing and affirming the excellent performance of N company through successful integration,it also analyzes and diagnoses the problems exposed in technology integration.According to the observation of the daily business of N company and the opinion exchange and discussion with the insiders of the company,the paper studies the improvement suggestions from the two aspects of corporate governance integration and cultural integration,and provides the corresponding suggested solution for N company’s improvement plan.After comparing the performance of multiple integration methods in this case,the conclusion is that strategic integration and business integration play a key role in the integration performance.Both parties of M&A have strategically aligned on the long-term development direction of N company.Meanwhile,rapid business integration will start to produce economic benefits in the short term.These two integration methods have realized the synergy benefit from the short-term and long-term dimensions,and ensured the success of this M&A integration.Of course,there are limitations in this paper,and individual case study cannot represent the common situation.It is also difficult to eliminate the impact of macroeconomic and market environment on the integration performance of N company.Before 2010,N company had not become an independent legal entity and could not obtain its financial data from public channels.When referring to this study in practice,we should use it flexibly according to the specific situation.