Chinese Company Cross-Border M&A Operation Model

Examining the whole process of cross-border merger and acquisition (M&A), an operation model for Chinese companies' cross-border M&A is constructed, explained and empirically proved by the case of Geely-Volvo M&A in this article. According to the model, a successful cross-border M&A operation requires the Chinese company to act as backbone of the operation, integrate internal and external forces, such as investment banks, consulting firms, commercial banks, and government agencies, to form an efficient M&A team, and assign one of its top managers to lead the team effectively to achieve M&A. The model identifies three phases in the cross-border M&A process: Preparation, implementation, and integration. During the preparation and implementation phases, external forces are leading and the Chinese company plays an assisting role. But the Chinese company takes the lead during the integration phase while the target firm and external forces become assisting forces. The right M&A decision-making, advantageous M&A cost, effective post-M&A integration, highly effective M&A project management are identified in the model as the success factors of M&A operation.