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Risks associated with mergers and acquisitions in business : a Chinese perspectiveYang, Ping Ping January 2012 (has links)
Thesis (DTech (Informatics))--Cape Peninsula University of Technology, 2012. / The rapid growth of Chinese cross-border mergers and acquisitions have attracted global
attention to Chinese businesses. As new mechanisms of Chinese expansion in the
international business arena, cross-border mergers and acquisitions have necessitated indepth
academic studies of the risks associated with these activities from a Chinese business
context. The influence of the Chinese government's domination of Chinese business is not
only presented as different merger and acquisition tactics, but also as styles of operation and
management in the process of integration. In cooperating with different counterparts, the
shareholders of both acquiring and acquired companies are seeking solutions to related
structural and operational changes. This relies on an effective risk management system to
achieve a successful synergistic alliance for value creation. In this research study a conceptual framework was developed to identify risks associated
with cross-border mergers and acquisitions. The framework aims at identifying risks at threes
levels, namely country, business and management. Risks at business and management level
are the result of risks at country level, while risks at country level reflect risks at business and
management levels. Therefore, risks identified in Chinese inbound mergers and acquisitions
will be valuable risk parameters to Chinese outbound mergers and acquisitions. Cooperation during integration is pivotal to successful mergers and acquisitions. Operational
and managerial styles of Chinese businesses are profoundly affected by factors such as the
Chinese government's role in business, economic policies, laws and regulations, culture, and
so forth. This research identifies risks associated with Chinese post- inbound mergers and
acquisitions that are impacted upon by Chinese government domination, from a Chinese
business perspective.
In approaching this objective, this research studied 34 Chinese inbound mergers and
acquisitions using a multiple case study method. The research adopted methodological
triangulation for collecting evidence, and aimed at using in-depth case analyses to identify
risk factors to add academic value to the field of study. As a result, the research findings
strongly indicate that the Chinese government's domination has an extensive and intensive
impact on risks associated with Chinese businesses in cross-border cooperation. These
identified risks include business strategies and operation, policy implementation, legal
compliance, and management performance. Consequently, risks associated with Chinese
inbound mergers and acquisitions will mirror the risks of Chinese outbound activities. The research results contribute to the practical application for managing risks associated with
both Chinese inbound and outbound mergers and acquisitions. As a solution, mitigation of
risks is recommended in the process of both pre- and post- mergers and acquisitions. The
research provides valuable insights for both risk management and practitioners in mergers
and acquisitions, and facilitates the achievement of process synergy.
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