Global Mergers and Acquisitions, Volume II: Combining Companies Across Borders

91 Pages·2018·1.14 MB·English

by  Abdol S. Soofi

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by academic thought and acquisitions (M&As). It critically examines all functions that must and Acquisitions,
be performed in completing an M&A transaction. Domestic and cross-
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between them also exist. The book includes discussions of international
into course readings and
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reference materials for
in cross-border M&A transactions.
students expecting to tackle Given the increasing importance of China as the second largest
management and leadership economy in the world and Chinese companies’ growing merger and Combining Companies
challenges during their acquisition (M&A) activities globally, we devote the last two chapters of
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of Science and Technology Policy M anagement. Yuqin Zhang
business issues to every
student and faculty member. Dr. Yuqin Zhang received her doctoral degree in Management Science
and Engineering in 2004 from Academy of Mathematics and Systems
Science, Chinese Academy of Sciences. She is assistant professor in Eco-
nomics at the University of International Business and Economics, and
she has published several research papers in journals such as Journal of
For further information, a
Economic Studies, Journal of Internal Trade (in Chinese), and Journal of Sys-
free trial, or to order, contact: tems Science and Complexity.
[email protected]
Finance and Financial
www.businessexpertpress.com/librarians Management Collection
John A. Doukas, Editor
Global Mergers and
Acquisitions, Volume II

Global Mergers and
Acquisitions, Volume II
Combining Companies
Across Borders
Second Edition
Abdol S. Soofi
Yuqin Zhang
Global Mergers and Acquisitions, Volume II: Combining Companies
Across Borders
Copyright © Business Expert Press, LLC, 2018.
All rights reserved. No part of this publication may be reproduced, stored
in a retrieval system, or transmitted in any form or by any means—
electronic, mechanical, photocopy, recording, or any other except for
brief quotations, not to exceed 250 words, without the prior permission
of the publisher.
First published in 2018 by
Business Expert Press, LLC
222 East 46th Street, New York, NY 10017
www.businessexpertpress.com
ISBN-13: 978-1-94709-872-5 (print)
ISBN-13: 978-1-94709-873-2 (e-book)
Business Expert Press Finance and Financial Management Collection
Collection ISSN: 2331-0049 (print)
Collection ISSN: 2331-0057 (electronic)
Cover and interior design by S4Carlisle Publishing Services Private Ltd.,
Chennai, India
First edition: 2014
Second edition: 2018
10 9 8 7 6 5 4 3 2 1
Printed in the United States of America
Dedication
Abdol Soofi dedicates this book to his wife Xing, to his daughter Rima, to
his son Shauheen, and to the loving memory of his son Rosteen.
Yuqin Zhang dedicates this book to her father Wenhai Zhang, her husband
Hongbin Dong, and her daughter Yicheng Dong.

Abstract
This book primarily deals with corporate restructuring through mergers
and acquisitions (M&As). It critically examines all functions that must
be performed in completing an M&A transaction. Accordingly, the book
gives a bird’s-eye view of processes of M&A. Domestic and cross-border
M&As are very similar in many respects even though differences between
them also exist. This book discusses the cross-border financial issues such
as international finance and multinational financial management, which
also arise in cross-border M&A transactions.
Given the increasing importance of China as a global economic leader as
well as Chinese companies’ growing outbound M&A activities, we devote
the second volume of the book to China’s outward foreign direct investment
and cross-border M&A activities. The case studies regarding Chinese f oreign
direct investment, both in Greenfield and acquisition forms of v olume II of
the book, give additional insights into challenging tasks of due diligence and
postmerger cultural integration that foreign investors face.
The selected topics constitute the core of M&A procedures, the
knowledge of which is imperative in M&A decision making. These tasks
include developing a strategy for merger or acquisition, finding a target,
conducting due diligence, appraising the value of the target company,
negotiating, and structuring the deal. Finally, the book covers the most
challenging phase of an M&A transaction, that is, successful integration
of the acquiring and acquired companies. In short, the book is written as
a concise guideline for those readers who are interested in gaining a clear
understanding of what a merger or acquisition entails.
The M&A literature is a fragmented field of inquiry. The book brings
together essential, practical insights from this vast literature in a short,
but cohesive form that hopefully has excellent managerial relevance and
applicability.
Keywords
business valuation, cost of capital, cross-border acquisition, cultural inte-
gration deal structuring, exchange rate, FDI and national security, foreign
direct investment, merger and acquisition, strategy, target selection, real
options, regulatory agencies

Contents
Preface to the First Edition .....................................................................xi
Preface to the Second Edition ................................................................xiii
Acknowledgments ..................................................................................xv
Introduction .......................................................................................xvii
Part II Cross-Border M&A Activities of Chinese
Enterprises .......................................................................1
Chapter 14 China’s Outbound Foreign Direct Investment ...................3
Chapter 15 Major Issues in Chinese Cross-Border Mergers and
Acquisitions ....................................................................15
Part III Case Studies of China’s Mergers and
Acquisitions Abroad .....................................................41
Notes....................................................................................................61
References .............................................................................................63
Index ...................................................................................................67