Analysis of Geely's Acquisition of Volvo

Abstract

Cross-border M&A is one of the ways for enterprises to enhance their international competitiveness as soon as possible. Enterprises may gain technology and other excellent resources through cross-border M&A. In 2008, the financial crisis triggered by the subprime mortgage crisis in the United States caused the consumer market to shrink, and a large number of car companies suffered serious losses and faced a huge risk of bankruptcy, so some well-run companies acquired those companies that were on the verge of bankruptcy. This study examines Geely's acquisition of Volvo during the financial crisis and analyzes the impact of the acquisition. According to the analysis, this acquisition has enabled Geely to obtain many advanced technologies and patents, increase market share, and show a growth trend in revenue. However, the large amount of debt in the acquisition process also makes Geely face huge financial risks in the later stage, as well as problems such as corporate culture integration, and overall, this acquisition provides a good foundation for Geely's subsequent development. These results demonstrate the unique features of Geely's acquisition of Volvo under the financial crisis, summarize the impact of the later period, and make recommendations for Chinese enterprises to carry out cross-border mergers and acquisitions..