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Under The Action Of Cross-border Mergers And Acquisitions Of Chinese Characteristics

Oct 27, 2016

According to reports, the shuanghui Smithfield a $ 4.7 billion cash offer attracted wide attention at the same time and again Chinese enterprises ' access to technology and brand through cross-border mergers and acquisitions, improve their core competitive advantage development highlighted.


In fact, the traditional cross-border investments and mergers and acquisitions can be divided into two categories. First class is designed to make better use of existing technical, managerial and financial advantage, to reduce transportation costs by cross-border investments or mergers and acquisitions, bypassing trade barriers and better explore the overseas market. Overseas investments by many Western countries after World War II belong to this category.


Second cause of cross-border investments and mergers and acquisitions is that, with the development of the national economy, labour and other costs rise, leading some industry comparative advantage faded; this type of cross-border investments and mergers the industry abroad, using foreign cheap resources and labor to maintain and extend its competitive edge. Is a good example of this is Japan companies in a series of overseas investment in the sixties or seventies of the 20th century.


Purposes specific to cross-border mergers and acquisitions by Chinese companies bring unique challenges. In any organization, the authority can be divided into two, one is derived from property rights and duties, the formal authority, and second, due to factors such as knowledge, skills, and information of informal authority. After the traditional cross-border mergers and acquisitions, buyers also have the property of formal authority and informal authority based on knowledge and skills, both stacking can produce a maximum of potential energy, promote integration synergy. Of course, even in such conditions, integration may not be smooth sailing.