A Strategic Guide to Cross-Border Acquisitions by Multinational Companies:  An Analysis Based on Success and Failure Cases

Yuchen Chen

doi:10.54254/2754-1169/2024.18733

Research Article

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Published on 26 December 2024

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Chen,Y. (2024). A Strategic Guide to Cross-Border Acquisitions by Multinational Companies: An Analysis Based on Success and Failure Cases. Advances in Economics, Management and Political Sciences,128,134-139.

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A Strategic Guide to Cross-Border Acquisitions by Multinational Companies: An Analysis Based on Success and Failure Cases

Yuchen Chen *^,1,

¹ University of New South Wales, Sydney, Australia

* Author to whom correspondence should be addressed.

https://doi.org/10.54254/2754-1169/2024.18733

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.

Keywords

cross-border, acquisitions, decision-making, strategic

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References

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About volume

Volume title: Proceedings of the 3rd International Conference on Financial Technology and Business Analysis

Conference website: https://2024.icftba.org/

ISBN：978-1-83558-785-0(Print) / 978-1-83558-786-7(Online)

Conference date: 4 December 2024

Editor：Ursula Faura-Martínez

Series: Advances in Economics, Management and Political Sciences

Volume number: Vol.128

ISSN：2754-1169(Print) / 2754-1177(Online)

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