The Influence And Motivation Of Mergers And Acquisitions Of State-owned Enterprises By Foreign Capital

Foreign capital is attracted by the large-scale market size in China since China joining WTO.Existing studies have shown that the introduction of foreign capital by disadvantaged enterprises can improve technological innovation capabilities and corporate performance by exerting technological spillover and improving corporate governance.Judging from the experience of the reform and opening-up,Chinese enterprises have achieved technological breakthroughs and rapid development through the introduction of foreign capital.However,continuous international trade frictions and technology competitions in recent years indicate that the technology blockade and technology prevention from developed countries are also becoming more and more serious.So at present,can state-owned enterprises obtain resources through the introduction of foreign capital to break through the development dilemma? This thesis takes Samsung Corning’s acquisition of Shenzhen SEG as an example to conduct research,the viewpoint of this thesis is that multinational corporations will not transfer key core technologies to Chinese enterprises when they acquire Chinese enterprises,and their real purpose is acquiring Chinese market resources through M&A or seizing benefits of control through related transactions.In addition,the lack of actual controllers in government controlled state-owned enterprises makes it easier for foreign capital to seize benefits of control.As a result,the innovation ability and corporate value of state-owned enterprises cannot be improved after introducing foreign capital,which in turn leads to the loss of state-owned capital.First of all,this thesis reviews the domestic and foreign literatures from the aspects of the motivation of M&A by foreign capital and the consequences of M&A by foreign capital.Secondly,based on the theoretical basis of product life cycle theory,principal-agent theory and comparative advantage theory,this thesis builds a theoretical analysis framework of the motivation and consequences of M&A by foreign capital,and demonstrates the viewpoints of this thesis theoretically.In the case analysis section,this thesis first analyzes Shenzhen SEG as a local state-owned enterprise in Shenzhen,its controlling shareholder,the local governments,and the state-owned enterprise’s demand for introducing foreign capital,as well as the motivation for foreign capital Samsung Corning to acquire local state-owned enterprises.Next,this thesis analyzes the changes in Shenzhen SEG corporate governance,related transactions,and technological innovation after the M&A by Samsung Corning which shows that Samsung Corning intensifies interest encroachment to Shenzhen SEG,and Shenzhen SEG’s technological innovation ability declines,which in turn leads to a decline in the Shenzhen SEG’s value.Finally,through the case above,it is proved that although the introduction of foreign capital can play a role in improving corporate governance and promoting technology in theory,in practice,when the company’s technical foundation is relatively weak,the introduction of foreign capital cannot really bring about technological improvement.Local state-owned enterprises may become a sales channel for foreign capital to transfer low-end technologies and obtain resources in the Chinese market after introducing foreign capital.The enlightenment from the case in this thesis is that state-owned enterprises cannot completely rely on M&A by foreign capital when seeking to break through development difficulties of local state-owned enterprises.As far as local governments are concerned,they should be cautious when introducing foreign capital and formulate national security examination system and corporate governance restraint system to maximize the positive effects and minimize the negative effects of M&A by foreign capital.