| With the active promotion of Chinese "going global" strategy,cross-border mergers and acquisitions have gradually become an important way for Chinese private enterprises to grow.As an important part of Chinese market economy,private enterprises occupy an increasingly important position in the entire economic system.Especially in recent years,the increasingly active cross-border M&A of private enterprises have become the main force of foreign direct investment.However,the cross-border merger and acquisition of private enterprises in China started later,with a shorter development time and lack of experience.Many aspects are still being explored.Although private enterprises and state-owned enterprises have many similarities in cross-border mergers and acquisitions,the production environment,policy support,and business philosophy of private enterprises are clearly different from those of state-owned enterprises.Legitimacy,which is necessary for crossborder mergers and acquisitions and affects the success or failure of cross-border mergers and acquisitions.Therefore,this article starts from the private enterprises and studies the legality of their cross-border mergers and acquisitions.First of all,this article sorts and studies the previous literature based on the cross-border mergers and acquisitions of Chinese private car companies.Due to the high requirements of the automotive industry on corporate qualifications,supply chain integration,and brand culture,especially in cross-border mergers and acquisitions,Among high-risk corporate behaviors,legitimacy is particularly important.Combined with the essential characteristics of cross-border mergers and acquisitions,the author has selected a literature review of relevant theories including foreign direct investment theory,institutional theory,and legitimacy.A new definition of legitimacy is proposed----the acquired company realizes higher corporate value and better financial performance after cross-border mergers and acquisitions.Next,this article analyzes the legality of cross-border mergers and acquisitions of Chinese private enterprises.On the one hand,from the perspective of the necessity of legality,in this cross-border mergers and acquisitions,due to the identity gap between Geely and Volvo,it will change from organizational identity,Group identity and individual identity weaken the legitimacy,thus affecting the completion of crossborder mergers and acquisitions.On the other hand,from the perspective of legitimacy,the Geely Group needs to analyze the specific legitimacy at different stages before and after the merger.Including the qualifications of cross-border mergers and acquisitions of private enterprises,the relevant policies of the national government,the attitude of the government of the target company’s country to the cross-border mergers and acquisitions,the review of the strength and qualification of Geely by the seller Ford.Thirdly,it studies the design and implementation of Geely’s transnational merger and acquisition of Volvo’s legitimacy strategy.In the design of the legitimacy strategy,the impact of Geely as a Chinese private enterprise on legitimacy,the attitude and personal influence of Li Shufu,chairman of Geely,and the international top-level M & A team formed by Geely have contributed to the design of the legitimacy strategy In the implementation of the legitimacy strategy,Geely mainly adopted the compliance strategy,selection strategy,manipulation strategy and creation strategy,which specifically include obtaining government support,innovative financing methods,strength demonstration,interest commitment,dialogue mechanism,final negotiation and effective resource integration.Such as the specific legitimacy strategy,throughout the merger and acquisition,the effect of obtaining legitimacy is very significant.Then,the legality effect of Geely’s cross-border merger and acquisition of Volvo was tested.On the one hand,from the perspective of discounted free cash flow valuation,the valuation result was much larger than the consideration paid by Geely when it acquired Volvo.The cross-border merger and acquisition behavior showed that with sufficient legitimacy,Volvo’s performance after the merger and acquisition far exceeded the level at the time of the merger or the level expected at the time of the merger.On the other hand,during the financial performance analysis of Volvo after the merger and acquisition,it was found that Volvo after the merger turned into a profit,thanks to the rapid growth of Volvo ’s global sales after the merger,especially in the Chinese market.In other regions,it shows that the acquisition of legitimacy strategy has a major impact on the profitability of Volvo after the merger.The results of free cash flow valuation and financial performance analysis show that firstly,the merger and acquisition has regulatory legitimacy,and the management and management activities can be successfully carried out only after it has been recognized by the government and regulatory agencies;secondly,good financial results also reflect It demonstrates that the company’s production and operation behaviors and concepts conform to industry standards,comply with the value concept system,and have sufficient normative legitimacy.Finally,the valuation results and financial performance analysis are direct evidence that the company has obtained market support and recognition from stakeholders and consumers.This shows that M & A behavior has high cognitive legitimacy.Finally,the research conclusions of this article are summarized,and three suggestions are proposed for private enterprises.First,encourage and support private enterprises to go abroad;second,combine investment and financing to reduce operating risks;and third,make full use of the Chinese market.Advantages to provide more benefits for corporate mergers and acquisitions. |
