A Strategic Guide to Cross-Border Acquisitions by Multinational Companies: An Analysis Based on Success and Failure Cases
Year: 2024
Type: article
Abstract: This article analyzes the factors for success and failure in cross-border acquisitions (CBAs) through the cases of Geely's acquisition of Volvo in Sweden and TCL's acquisition of Thomson in France. After Geely acquired Volvo achieved short-term profitability, market share growth, and long-term knowledge and technology integration. Its success includes reducing acquisition risks, the importance of top management's decision-making, innovation and development and strategic transformation after the acquisition, and precise market grasp. However, after TCL acquired Thomson, its performance was poor, facing issues such as reduced net profit and market losses. The reasons for failure include ineffective integration and innovation of resources, differences in the social regulatory environment between the two countries leading to management difficulties, and insufficient assessment of project rationality and risks. Finally, suggestions are provided for multinational companies conducting CBAs, emphasizing the importance of pre-acquisition assessment, teams and valuation during the acquisition, resource integration after the acquisition, and the crucial role of the decision-making process, which needs to be analyzed specifically in different situations.
Author: Yuchen Chen
Institution: UNSW Sydney
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4405817740