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Chinese State-Owned Enterprises in the Market for Corporate Control. Evidences and Rationalities of Acquisition in Western Countries

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Chinese Acquisitions in Developed Countries

Part of the book series: Measuring Operations Performance ((MEOP))

Abstract

In this chapter, we propose an exploratory analysis of the Chinese acquisition of foreigner companies by state-owned enterprises during the last ten years (2008–2017). Cross-border merger and acquisition (M&A) carried out by Chinese companies have shown strong growth, and have gradually emerged as the dominant vehicle for Chinese outward investment. Our aim is to understand the main dynamics underling the phenomenon of Chinese state-owned enterprises acquisitions in advanced countries. For this purpose, in our analysis we target only mergers and acquisition of companies in western countries in the last ten years. Our data collection returned a sample of around 150 cases. We use both quantitative and qualitative data to get insights about the main patterns of acquisition, industry choice, and country location. Moreover, we try to fill the gap related to the understanding of the rationalities for such strategic-asset-seeking M&A. Our conclusion contributes to the literature on international M&A and supports the business-oriented strategy of state-owned enterprises in dealing with cross border acquisitions.

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Notes

  1. 1.

    According to data from UNCTAD. See: UNCTADstat, http://unctadstat.unctad.org/EN/Index.html.

  2. 2.

    Please, refer to Appendix for further details on the “Going Out policy” introduced by the Chinese central government to encourage domestic companies to go abroad to make investments, utilize foreign reserves, establish consumer bases, as well as enhance China’s international political and economic influence—much of which had to be accomplished through M&A.

  3. 3.

    The measures, known as “NDRC 11” build on prior ODI management rules published by the National Development and Reform Commission (NDRC) in 2014.

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Author information

Authors and Affiliations

  1. ICRIM Center of Research, Università Cattolica del Sacro Cuore, Via Necchi 5, 20123, Milan, Italy

    Alessandro Baroncelli & Matteo Landoni

Authors
  1. Alessandro Baroncelli
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  2. Matteo Landoni
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Corresponding author

Correspondence to Matteo Landoni .

Editor information

Editors and Affiliations

  1. Department of Management, University of Bologna, Bologna, Italy

    Alessandra Vecchi

Appendix

Appendix

Main policies promulgated by the Chinese Government to guide companies’ outbound investments (KPMG 2018).

  • “Made in China 2025” Plan:

Published in May 2015, the plan calls for China to support the development of multinational corporations that raise China’s core competitiveness in advanced manufacturing through global sourcing, business process reengineering, supply chain consolidation and capital market operations.

  • “Internet Plus” Plan:

Published in July 2015, this plan calls to leverage major national strategies such as the BRI to support and encourage China’s competitive internet firms to take the lead in global expansion along with companies in the manufacturing, finance and telecommunications sectors. Chinese companies can work together and leverage their strengths through a combination of overseas M&A, joint operations and the establishment of overseas offices to expand business in global markets; deepen international production capacity cooperation; establish cross-border industrial value chains; and enhance global competitiveness

  • Guiding Opinions of the State Council on Boosting the Leading Role of New Consumption to Speed Up the Cultivation of New Supplies and Engines:

Published in November 2015, this policy document calls for companies to adopt more proactive strategies for internationalisation; better utilise global markets and inputs to upgrade domestic industry; and more efficiently use global products and services to meet the increasingly diverse and sophisticated demands of the domestic consumer market.

  • National Innovation-Driven Development Strategy Outline:

Published in May 2016, this strategy calls for the Chinese Government to support Chinese companies’ efforts to develop a global network of innovation, encourage them to establish overseas R&D centres, and improve their capacity to effectively manage the commercial exploitation of intellectual property rights in overseas markets.

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Baroncelli, A., Landoni, M. (2019). Chinese State-Owned Enterprises in the Market for Corporate Control. Evidences and Rationalities of Acquisition in Western Countries. In: Vecchi, A. (eds) Chinese Acquisitions in Developed Countries. Measuring Operations Performance. Springer, Cham. https://doi.org/10.1007/978-3-030-04251-6_2

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