Cross-Border M&As by Chinese Firms: An Analysis of Strategic Motives and Performance

This article considers the strategic motivation and performance of Chinese cross-border merger-and-acquisition (M&A) activities of 27 deals that took place in the Shanghai and Shenzhen stock markets in 2000-2004. The study finds that cross-border M&As formation by Chinese firms are primarily motivated by market development (that is, increasing market share) to enable faster entry into new markets, promote diversification, and obtain foreign advanced technology and other resources. In terms of wealth creation, the study finds that cross-border M&As create value for Chinese acquiring firms. (C) 2008 Wiley Periodicals, Inc.