M&A by Chinese POEs in Developed Countries - Acquiring and Bundling Strategic Assets

Building on the resource-based view and based on 33 interviews with top executives of 11 Chinese private owned enterprises (POEs) and 15 Western target companies, this study is an in-depth multi-case analysis of Chinese crossborder merger and acquisitions. While literature has argued that acquisitions by Chinese companies in developed countries are motivated by asset-seeking, this study takes a more detailed look and investigates which exact assets are sought by POEs. Still a majority of the literature states that Chinese companies largely depend on their countryspecific assets much more than on firm-specific assets. Our study contradicts this view and shows that in many cases Chinese acquirers possess valuable firm-specific assets. Knowing the specific asset profile of the Chinese POEs, their assets and gaps, helps understand what assets they seek when they acquire Western companies. Furthermore, our study shows how they bundle strategic assets of acquired companies in developed countries with their own assets to create synergies. Different from the common view, our study provides evidence that technology transfer between Chinese POEs and Western targets went in both directions.