Strategic Analysis of Synergistic Effect on M&A of Volvo Car Corporation by Geely Automobile

Zhou Xia, Xiuzhi Zhang

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DOI: 10.4236/ib.2011.31002                

Abstract

Strategic M&A is focused on the development of enterprises within the same industry or related industries and has multiple effects such as economies of scale, structural integration of upstream and downstream industry chain, powerful alliances and complementary advantages. A major motivation of strategic M&A is the synergistic effect. In the upsurge of M&A at home and abroad, failed to achieve the synergistic effect is one of the important reasons of a high failure rate of M&A. This paper probes into the example of Geely Automobile’s M&A of Swedish Volvo Car Corporation in March 2010 from a strategic angle by analyzing the strategic decision-making, the competitive environment, the me-chanism of action, the evaluation and the realization risks of the synergistic effect, thus to provide references for the M&A practice of Chinese enterprises.

Keywords

Strategic Perspective, M&A, Synergistic Effect

Conflicts of Interest

The authors declare no conflicts of interest.

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