"Warfare is about courage. The first drum is about the early overseas mergers and acquisitions, the second is about decline, and the third is about exhaustion." The internationalization of Chinese enterprises is like a tough battle. The first drum is the early overseas mergers and acquisitions, when enterprises bravely attacked and tried to occupy a place in the global market; the second drum is about industry integration and adjustment, when enterprises gradually became rational and began to carefully select high-quality assets; now, the third drum is ringing, and internationalization has entered the stage of refined operation. Capital operation is no longer just a simple purchase, but how to achieve true global synergy.
American Goheal M&A Group
In today's market, the global economy is slowing down, the valuation of the European and American markets is falling back, and coupled with geopolitical variables, the overseas expansion of enterprises is no longer an era of "money can do it", but it depends on who can laugh last in the game between capital and the market. Goheal observed that in the new round of internationalization, Chinese enterprises are moving from extensive mergers and acquisitions to "precise positioning", targeting key links such as technology, brand, and supply chain, using mergers and acquisitions as a bridge to accelerate the process of globalization. So, under the current situation, which merger and acquisition strategies are the most valuable? How can Chinese companies seize the initiative in the global capital market?
Capital "going out": from scale expansion to precision attack
In the past two decades, Chinese companies' overseas mergers and acquisitions have gone through several typical stages:
The first stage: resources are king. Energy, minerals, and infrastructure are the focus. Chinese companies tend to obtain control of upstream resources through mergers and acquisitions, such as Chinese companies' acquisition of Australian mineral resources and African oil fields.
The second stage: market-driven. Companies began to pay attention to overseas market share. Industries such as automobiles, home appliances, and the Internet have gone overseas, such as Geely's acquisition of Volvo and Haier's acquisition of GE Home Appliances, etc., using overseas mature brands and channels to expand the global market.
The third stage: technology-based. Today's Chinese companies pay more attention to technology, brands, and industrial chain synergies. The targets of mergers and acquisitions are gradually moving closer to core technology companies, high-end manufacturing companies, and innovative brands.
At present, Goheal has discovered a new trend - "small but fine" overseas mergers and acquisitions have gradually become the mainstream. Compared with large-scale acquisitions of billions of dollars, more and more companies are beginning to seek small-scale but highly matched merger and acquisition targets to avoid "large and inappropriate" integration risks. This strategy can not only reduce financial pressure, but also achieve synergy faster, ensuring that mergers and acquisitions truly bring added value to the company.
Hot track: "Technology + Brand" dual-wheel drive
In the global M&A market, which industries are most worthy of attention? The answer is inseparable from the combination of "technology + brand".
1. Semiconductors and high-end manufacturing: Under the background of the reconstruction of the global chip industry chain, semiconductors, intelligent manufacturing, and precision instruments have become popular targets, such as Chinese companies acquiring European lithography equipment companies and Japanese precision instrument manufacturers.
2. Biomedicine: Chinese biomedicine companies accelerate their overseas layout and obtain R&D technology, core patents and global market access through mergers and acquisitions, such as Chinese pharmaceutical companies acquiring innovative American pharmaceutical companies and directly obtaining FDA-approved pipeline resources.
3. Consumer brands: Some Chinese consumer goods companies target old consumer brands in Europe and the United States and revitalize brand influence through mergers and acquisitions. For example, ByteDance acquired PICO, intending to layout the global XR (extended reality) market.
It is worth noting that the key to brand acquisition is not "buying well" but "using well". For example, after Geely acquired Volvo, it not only retained its brand independence, but also used Volvo's technology to feed back its own automotive business, achieving a win-win situation. Some other companies rashly changed their brand strategies after the acquisition, resulting in the loss of consumers, which made the merger and acquisition meaningless.
Difficulties of cross-border mergers and acquisitions: Integration capabilities determine success or failure
Many companies found out after overseas mergers and acquisitions that the real challenge was not "buying" but how to "manage". Cross-border mergers and acquisitions involve many challenges such as cultural integration, legal supervision, and talent management. If there is a lack of effective integration capabilities, they will often fall into the "M&A black hole".
After the merger and acquisition, some companies lost a large number of their original management due to cultural conflicts, affecting the normal operation of the company; some companies ignored local regulations and eventually failed in their merger and acquisition plans. The core of these problems is that mergers and acquisitions are not only capital operations, but also a test of operational management.
Goheal emphasized that in cross-border mergers and acquisitions, there are three key points that cannot be ignored:
1. Retain the core competitiveness of the acquired company. Mergers and acquisitions are not annexations, but collaborations. Respecting the advantages of the target of the acquisition can maximize the value.
2. Establish a localized team. Don't try to directly copy the domestic management methods to overseas markets. It is crucial to understand local culture and market rules.
3. Long-term layout and avoid short-term arbitrage thinking. Mergers and acquisitions are not a "one-shot deal". Companies must be patient and willing to invest time and resources in market integration.
Conclusion: Where are the next wave of globalization opportunities?
With the changes in the global economic landscape, the internationalization of Chinese companies has entered a new stage. Capital drive alone is no longer sufficient to support global competitiveness. Technology, brand, and supply chain integration have become the key. Which industries will usher in a wave of mergers and acquisitions in the future? How can Chinese companies find the most suitable internationalization path?
For companies that are planning overseas expansion, should they continue to expand or adjust their strategies? For investors, which M&A targets have the most long-term value? Welcome to leave a message to discuss!
Goheal Group
[About Goheal] Goheal is a leading investment holding company focusing on global M&A holdings. It has been deeply involved in the three core business areas of acquisition of listed company control, M&A and reorganization of listed companies, and capital operation of listed companies. With its deep professional strength and rich experience, it provides companies with full life cycle services from M&A to reorganization to capital operation, aiming to maximize corporate value and achieve long-term benefit growth.
