Cross Border Mergers by Chinese Companies

CROSS BORDER MERGERS BY CHINESE COMPANIES

For a long time, China's overseas M & A are very small in size, and limited to large state-owned enterprises, after wandering for a long time. With China's gradual liberalization of foreign trade of private enterprises, China's private enterprises overseas mergers and acquisitions have been rising enthusiasm, state-owned and private enterprises to work together, to make Chinese enterprises overseas mergers and acquisitions in the stage of rapid development

There are many drivers for Chinese enterprises to make international M&As

a) Core technology

The weak technical force has been the bottleneck of Chinese enterprise development. With the coming of knowledge economy, the competition between enterprises of the key shifted gradually from the production field to the technology innovation field, from the cost reduced competition to technological innovation competition. Enterprises in order to core technology to obtain overseas Large Firm, choose M & A form. For example, Lenovo's $17.5 billion purchase of IBM's personal computer business. Lenovo has not only gained IBM in personal computer business of all the customer relationship, sales channels, production facilities, more important is the IBM personal computer in the R & D capacity and related patents were obtained by M & A.

b) Brand

Brand is the important intangible assets of an enterprise, has the high value of the share. For the Chinese enterprises who desire to enter the international market, mergers and acquisitions overseas famous brand, get the high additional value of brand, is the more efficient and low cost way compared to the establishment of new world famous brand. Whether Lenovo's acquisition of IBM's personal computer business, or Geely's acquisition of Volvo, brand motivation is a very important factor.

c) Trade barriers

Trade barriers affect export of $40~$50 billion affect annually in China. After joining WTO, many industries in...