| Summary: | Since the last several decades, an increasing number of firms from emerging markets have joined the trend of cross-border M&As through the buying up of a high equity brand in the west, with China and India being among the most active participants. The cases from emerging market automakers are particularly looked into for providing a new insight to the previous research which seems to be irrelevant of industry groups. This research examines and explores three questions: firstly, the proactive motives and reactive motives behind the cross-border M&As of emerging market firms; secondly, the challenges during post-acquisition stage of the M&A deals; thirdly, the rationale that forms EMEs’ choice of cross-border M&As rather than equity joint venture as the entry mode of internationalisation.
By analyzing the case study of Geely’s acquisition of Volvo and Tata Motors’ acquisition of JLR, EMEs proactively conduct M&As for gaining advanced technology and the realising quick access to the rich global distribution channel, whereas the reactive motives vary from the Chinese and Indian firms due to institutional-specific factors. During the post-acquisition stage, challenges of cultural discrepancy may lead to difficulties on staff management, and also the supervision from the government could largely influence the performance. Furthermore, the benefits of a quick global presence, the chance to wipe out a competitor and the right to gain full control over the activities are among the crucial factors that push EMEs to adopt M&As instead of EJV as the main entry mode of internationalisation.
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