Enterprises generally believe that the current “going out†cross-border M&A of Chinese enterprises has entered a new stage and faces important development opportunities. As the Chinese economy is integrated into the global system at a deeper level, the pace of “going out†has gradually accelerated. Especially after the outbreak of the financial crisis, some overseas high-quality assets have shrunk dramatically, and the intention to sell abroad has increased. It is a Chinese company interested in overseas mergers and acquisitions. Provide a rare opportunity. First, it is conducive to upgrading the level of industrial technology and enhancing core competitiveness. In order to improve the level of industrial technology, cross-border mergers and acquisitions to obtain advanced technology mastered by foreign target companies has become one of the important ways for our company to explore self-development. For example, my large-scale enterprise group has successfully acquired several Japanese and German companies since 2002, and gradually formed a global acquisition, technology docking, internal and external linkage of cross-border M&A business philosophy, and rapidly improved the production technology level and core competitiveness; 2010 It also officially acquired 100% of a company in the United States. It wants to leverage its global leading technology and strong engineering R&D management experience to enhance its strength in the field of international printing machinery and equipment production. Second, it is conducive to enhancing research and development capabilities and enriching product lines. Improving the research and development capabilities of enterprises, improving product quality and production capacity is also one of the motivations for our company to implement cross-border mergers and acquisitions. In 2009, Geely Automobile successfully acquired DSI, the world's second largest automatic transmission company, thereby strengthening the development and production capacity of automatic transmissions. In 2010, Geely successfully completed the acquisition of Sweden's world-renowned luxury car brand Volvo, and entered the world's high-end motor vehicle production. Third, it is conducive to attracting global sales networks to expand overseas markets. Among the overseas target companies that I have acquired, many of them have mature sales channels and stable markets. Expanding overseas markets through acquisitions has also become an important reason for our overseas mergers and acquisitions. Guangxi Liugong plans to establish a manufacturing and R&D base in Poland and use it as a platform to establish a network of R&D, procurement, production, marketing and parts services in the European market. In January 2011, Liugong acquired the construction machinery division of HutaStalowaWola in Poland, and realized the above-mentioned plan by means of mergers and acquisitions, which greatly saved the cost and time of new overseas factories and quickly established the Eastern European market as the “second home market†of Liugong. Liugong can be used as a base to quickly sell high-quality engineering machinery products to Europe, North America and the CIS market. Fourth, it is conducive to improving the level of international management. After the merger, many companies have respected the cultural integration of the target companies by paying attention to the cultural integration of the two companies, and effectively improved the international operation level of the company. In recent years, the acquisition of overseas mineral resources by China Metallurgical Science and Technology has made rapid progress, and the mineral resources of M&A are widely distributed, involving Asia, Latin America and Oceania. In the face of cultural and social differences, China Metallurgical Science and Technology actively try to integrate with the local, such as hiring local employees as much as possible to benefit the local society after adopting overseas enterprises; adopting a localized and localized management model, respecting the countries where the acquired companies are located and The labor management habits of the region have established close ties with local trade union organizations and achieved good results. Difficulties and problems encountered by enterprises in cross-border mergers and acquisitions 1. The company's own experience is insufficient. From the international experience, cross-border M&A needs to comprehensively examine the investment environment and labor policies of the target countries, design a reasonable and effective investment structure, resource integration plan and exit channels, and fully conduct comprehensive investigations such as business and legal affairs to effectively avoid overseas investment risks. . However, many of my companies still have blindness in implementing cross-border mergers and acquisitions. Not only have they not considered the strategy of entering the overseas market before the merger, but also neglected to establish systematic and scientific M&A programs. After the merger, they also faced problems such as lack of management experience and poor operation. Huawei, AVIC International, China's Ryukyu and many other companies said that due to lack of practical experience, mergers and acquisitions are often in a passive situation, and merger and acquisition failure cases have occurred frequently. Second, lack of professional talent. For cross-border mergers and acquisitions, you need a mastery of international trade, international finance, international marketing, international business management and international business law, familiar with overseas M&A business, and can manage the professional talents of overseas M&A companies according to international practices. Geely Holding, China Metallurgical Science and Technology, and ZTE Corporation (000063, shares) all said that due to the lack of professional cross-border M&A talent team, enterprises face great difficulties in the process of cross-border M&A, and the project progress is slow. Third, the domestic administrative approval is complicated and lacks unified coordination. At present, if companies plan to invest abroad or acquire overseas companies, they need to go to multiple ministries for filing and approval. The procedures are cumbersome. The state does not have a specialized agency to coordinate and guide the overseas mergers and acquisitions of enterprises. Due to the lack of unified planning and rational layout, it is difficult to give full play to the overall advantages of Chinese enterprises in international competition. Many companies report that some departments are less efficient in the administrative approval of cross-border mergers and acquisitions, delaying the process of cross-border mergers and acquisitions. Fourth, the financing is not smooth, the channel is single. At present, the M&A financing channels of Chinese enterprises are relatively simple, mainly relying on their own funds and commercial bank loans. Commercial banks are mainly limited to providing loan funds for M&A activities of non-equity transactions. At present, it is rare to issue corporate bonds for mergers and acquisitions. Sometimes companies are subject to merger and acquisition opportunities due to the amount of financing and approval restrictions. China Metallurgical Science and Technology Co., Ltd. said that the investment cycle of mineral and energy industry projects is long, and the amount of funds required for cross-border M&A is large. At present, it is difficult for enterprises to fully support M&A, and there is an urgent need to expand effective channels for financing. 5. Lack of ability to integrate cultural differences. The cultural differences with the target countries of M&A have become a problem that has been more concentrated in our overseas M&A companies. It is difficult to avoid conflicts between the East and the West in two different cultural contacts, which will have a great impact on the integration of enterprises after mergers and acquisitions. After the acquisition of Alcatel, TCL Group did not integrate cultural differences, resulting in serious loss of original talents, resulting in the company's inability to operate smoothly. 6. Political factors often have a major impact on the outcome of mergers and acquisitions. Chinese companies are often confronted with political factors during cross-border mergers and acquisitions. The political risk is mainly manifested in the turmoil of the host country's political situation, which brings business risks to the enterprise; and the host country to obstruct the foreign companies' merger and acquisition of domestic enterprises in order to protect the domestic enterprises and use various excuses such as national security. Following the acquisition of 3Com, a US network equipment manufacturer, bidding for Motorola's wireless network division, and bidding for 2Wire, a US private broadband Internet software provider, Huawei's acquisition of US Clover in February this year was again unaffected by political factors. . Related advice First, strengthen policy guidance, improve supporting laws, and simplify the examination and approval process. Since cross-border mergers and acquisitions involve many interests at home and abroad, it is recommended that relevant state departments strengthen medium- and long-term forecasts and policy guidance on relevant national security issues, and rationally guide mergers and acquisitions. We can learn from the foreign legislative experience on cross-border mergers and acquisitions and combine international law and international practices to establish an international M&A legal framework that is in line with China's national conditions, and intensify the formulation of relevant laws, and make clear provisions on approval procedures, foreign exchange remittance, financial financing, and taxation policies. Simplify the examination and approval process, so that Chinese enterprises have laws to follow and have rules to follow in cross-border mergers and acquisitions. Second, improve the financial support system for cross-border M&A. A good financial policy environment is an important condition for facilitating companies to obtain funds for cross-border mergers and acquisitions. Recommendation: Open up overseas financing channels for companies. Large enterprise groups are allowed to directly finance in domestic and foreign financial markets, and they are given overseas financing rights and investment rights, so that enterprises can use the international capital market to raise a large amount of foreign M&A funds and expand China's use of foreign capital. Relax special foreign exchange controls. For large enterprise groups with good domestic business performance, experience in transnational operations, and self-balanced foreign exchange through import and export trade or B-share market, it is recommended to grant foreign exchange remittance rights and relax foreign exchange use, profit remittance, and funds of their overseas subsidiaries. Restricted restrictions on other aspects, allowing them to re-invest in overseas profits. Promote the construction and development of investment banks. Provide consulting and financing services for companies involved in cross-border mergers and acquisitions. Third, strengthen the government's international public relations. The mergers and acquisitions of Chinese enterprises in developed countries in Europe and America are often influenced by political factors. In contrast, the mergers and acquisitions of Chinese enterprises in Sudan, Nigeria and other African regions have been carried out smoothly, which is closely related to the good image that China has established in these regions. Therefore, it is recommended to strengthen the government's international public relations, establish the image of Chinese enterprises actively participating in international cooperation, enhance the country's soft power and reputation; strengthen inter-governmental negotiations, promptly defend enterprises that are unfairly treated in mergers and acquisitions, and gradually become cross-border mergers and acquisitions for enterprises in the future. Create a favorable international environment across political barriers. Fourth, support the role of industry organizations in the cross-border mergers and acquisitions of service enterprises. Establish a cross-border M&A information platform. Through the network platform to summarize M&A projects, relevant national policies, laws and regulations, etc., provide rich and timely reference materials for enterprises to develop cross-border M&A programs. Organize enterprises to conduct relevant training on cross-border mergers and acquisitions, and provide consulting services for cross-border mergers and acquisitions. Establish a pool of professional talents for cross-border M&A. Industry associations such as chambers of commerce collect, discover and summarize information on cross-border M&A professionals, and create information bases for professionals including marketing, trade, law, negotiation, and foreign languages. Close contact with foreign business organizations and industry organizations in various countries. Support Chamber of Commerce to strengthen cooperation with international industry organizations, international regional organizations, foreign government agencies, etc., to understand and collect cross-border M&A information on a global scale, to understand regional policies and regulations, cultural folklore, share relevant information resources, and eliminate M&A projects to the greatest extent possible. Obstacles caused by other factors.
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