A study of Chinese cross-border M&A integration

Song, Huimin (2019) A study of Chinese cross-border M&A integration. PhD thesis, University of Nottingham.

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Abstract

Chinese cross-border mergers and acquisitions (M&As), particularly post M&A integration, is still a relatively poorly understood phenomenon. The extant literature on the topic has attempted to examine the factors that can explain the integration outcome of Chinese companies’ cross-border M&As (CBMA). Indeed, some China-specific frameworks, or Chinese CBMA integration frameworks, have been proposed to better understand the phenomenon. These include the so-called light-touch integration framework and courtship-marriage-birth framework. These conceptualization of Chinese CBMA have provided some answers to questions related to integration outcome and have shown the role of both culture and strategy. While insightful, they still have certain lacunae. In particular, this extant Chinese literature of integration outcome is somewhat narrow (e.g., focus on ‘integration mode’), ignores strategic review as part of strategic factors, ignores cross-cultural psychology as part of cultural factors, and considers only one aspect of mediating factors (through intermediaries).

Therefore, in my thesis I offer a conceptual framework for Chinese cross-border M&A integration that not only draws from these past attempts at conceptualizing the phenomenon under study but builds and extends them to include the above mentioned factors. It groups direct factors as strategic influences and cultural influences, with indirect factors captured as mediating factors. Strategic influences consist of strategic fit (synergy potential and industry complementarity), strategic intent, and strategic review. The latter being my contribution to understanding Chinese CBMA integration as far as ‘strategic role’ impinges on integration outcome. Cultural influences are made up of cross-cultural differences, cultural specific dimensions, and cross-cultural thinking and decision-making. The latter, as a cross-cultural psychological factor, is my contribution from a cultural standpoint. Mediators or mediating factors are seen as comprising of intermediaries, communication and language, and learning and time. The notion of the role communication/language as mediating outcomes is somewhat new in the study of Chinese CBMA integration, as is time.

This thesis then tests this framework adopting a multi-case study approach first and then a single case study approach. The former approach uses secondary archival sources on four high profile cases, namely, Geely’s acquisition of Volvo in 2010, SAIC’s acquisition of Ssangyong in 2004, Lenovo’s acquisition of IBM’s PC unit in 2005, and TCL merger with Thomson’s TV business in 2004. The latter approach uses primary source of information through data collected via an in-depth interview of a single case, Geely (CEO of said company to be precise). Both sets of qualitative evidence provide valuable insights on the phenomenon under study and about my conceptual framework (its validation or falsification). The evidence is overall supportive of the factors under study, with first-hand and second-hand evidence complementing each other and also offering different insights. For example, the second-hand case findings document the significant role of external advisors and professionals (intermediaries), but the first-hand case findings de-emphasize their role to that of a supporting act, though relevant (e.g., Geely’s CEO highlighted that ultimate decisions and strategizing still rest with the company). In addition, first-hand evidence shows the many facets of integration, not revealed by the second-hand data. This includes emphasis on how to measure integration through key performance indicators and the need to look beyond short-term measures and that measures can change due to the market environment and is contextual (especially culturally).

Item Type: Thesis (University of Nottingham only) (PhD)
Supervisors: Yao, Shujie
Gunessee, Saileshsingh
Zhang, Xiaoling
Keywords: Merger and Acquisition; Cross-border M&A integration; culture; strategic review and intermediary
Subjects: H Social sciences > HD Industries. Land use. Labor
Faculties/Schools: UNNC Ningbo, China Campus > Faculty of Business > Nottingham University Business School China
Item ID: 56365
Depositing User: SONG, Huimin
Date Deposited: 08 Jul 2019 05:52
Last Modified: 07 May 2020 12:48
URI: http://eprints.nottingham.ac.uk/id/eprint/56365

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