Making the unlikely marriage work: The integration process of Chinese strategic asset-seeking acquisitions

Qiuxia Zheng, Niels Noorderhaven and Jian Du

Journal of World Business, 2022, vol. 57, issue 3

Abstract: Chinese firms increasingly engage in risky strategic asset-seeking acquisitions in developed economies. Realizing the potential value of these acquisitions requires a careful integration process. Based on an analysis of Geely's acquisition of Volvo in 2010, we develop a spiraling model that helps us understand these post-acquisition integration processes. We identify that external and internal legitimacy issues and pressures for value creation are the main factors influencing the integration process. In combination and over time, these forces lead to different configurations of symbolic management (geared to address legitimacy concerns) and substantive management (aimed at the realization of synergies). In the Geely-Volvo case this led to four stages through which the integration process proceeded — distancing, balancing, building, and diversifying. Other comparable acquisitions may go through slightly different phases, depending on circumstances, but we expect the same set of forces to mold these integration processes in similar ways.

Keywords: Chinese cross-border acquisitions; Legitimacy issues; Spiraling post-acquisition integration; Value creation (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (6)

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DOI: 10.1016/j.jwb.2021.101305

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