Study On Motivation And Performance Of Geely Holding’s Continuous Cross-border Mergers And Acquisitions

At present,the world economic situation is becoming increasingly complicated.In the meantime,The degree of China’s high-level opening to the outside world is continuously being improved.We all hope to find new profit growth points through OFDI including cross-border mergers and acquisitions and other ways of external development.Corss-border M&A is an valuable subject for scholars to study,especially for enterprise M&A motivation and M&A performance.However,most of the existing research results treat M&A events independently and scholars tend to study the motivation and performance of a single M&A event.However,the reality is that many enterprises accumulate certain M&A experience and start the road of continuous M&A after reaching the expected target of the single M&A,and the continuous cross-border M&A behavior of enterprises is increasing.However,at present,there are relatively few researches on Chinese enterprises’ continuous cross-border M&A.Cross-border M&A occupies a large proportion of China’s automobile enterprise M&A.Among the numerous M&A transactions,a series of cross-border M&A activities of Geely Holding Group have a great impact and are relatively successful,which has important reference and research value.Take Geely holding group as the object of case study,this paper follows the route of the combination of theory with practice,with the method of single case study,analysis of Geely holding continuous cross-border M&A events of 2009 to 2018,summarizes the Geely holding group to carry out the continuous transnational m&a motivation.This paper analyzes the impact of a series of transnational M&A on enterprise performance.It provides reference for enterprises to improve the performance of cross-border M&A.Through the analysis of Geely Holding’s continuous cross-border M&A,the conclusions of this paper are as follows:(1)There are four main motivations for Geely Holding’s continuous cross-border M&A: expanding overseas markets,seeking technological innovation,obtaining competitive advantages and realizing synergies.(2)The short-term performance of Geely Holding Group in the early stage of continuous cross-border mergers and acquisitions was poor.The market and investors took a negative attitude towards geely’s first merger and acquisition event,and the market reacted negatively.However,with the accumulation of experience in M&A and Geely’s continuous progress,the market reaction in subsequent mergers and acquisitions has improved,and investors have confidence in its follow-up development.The short-term performance of Geely Holding Group in the early stage of continuous cross-border M&A was poor.The market and investors took a negative attitude towards geely’s first M&A event,and the market reacted negatively.However,with the accumulation of experience in M&A and geely’s continuous progress,the market reaction in subsequent M&A has improved,and investors have confidence in its follow-up development.(3)Geely Holding’s financial performance after successive cross-border M&A :Geely Holding Group’s M&A activities generally reduce corporate debt risks,and its profitability generally shows a trend of decline in the begining and then have an ascension.As for asset quality,M&A activities have not played a positive role in improving asset quality.In terms of business growth,the continuous cross-border M&A activities generally enhance the business growth capacity of company,and the rate of growth shows a descend trend in the start but the overall trend is upward.(4)Geely Holding’s non-financial performance after successive cross-border mergers and acquisitions: the domestic and foreign market share expands and the market share is improved.The research and development capacity of the group continues to improve,the number of patents increased significantly,and the research and development achievements are rich.After the completion of the merger,the integration effect of culture,management and finance is outstanding,and the merger can achieve the expected goal of the enterprise.In view of the above research conclusions and combined with the merger and acquisition experience accumulated in the merger and acquisition activities of Geely Holding,the following suggestions are put forward for Chinese auto enterprises to acquire overseas enterprises:(1)Find the appropriate time for M&A,and make up for the lack of core resources according to the enterprise development strategy.(2)Innovate M&A payment and financing methods,and use stock payment and stock financing more.(3)Attach importance to the integration of enterprises after merger and acquisition.