To clarify M&A's motivation and purpose, first of all, enterprises should clarify why they want to implement M&A in China and what they want to achieve through M&A ... Some multinational companies merge in China in order to enter new markets, and the income is only part of their pursuit goal. It is important to seize the opportunity to enter the China market. Others hope to gain new customers and new market opportunities through mergers and acquisitions, reduce competitors and achieve faster growth. Before M&A, we should clearly understand the purpose of M&A, and we should not do so blindly. And according to the purpose of M&A, choose the appropriate M&A target. For example, the most important thing is whether the acquired object has comparative advantages, such as special expertise, specific market or marketing network. Starting from the overall strategic goal of enterprise internationalization, it is clear that transnational M&A is for market, technology, brand and resources. In this way, we can choose the target enterprises that meet the purpose of mergers and acquisitions, and avoid heavy-quality and light-weight mergers and acquisitions. Conduct extensive research and formulate M&A strategy. According to the purpose of M&A, conduct extensive research and collect information comprehensively and accurately, instead of taking opportunistic actions. M&A behavior should not only consider its own capital strength and M&A cost, but also consider economic cost and expected income. Instead of blindly buying "cheap" enterprises to expand, it is better to judge whether M&A can achieve the expected strategic goal through repeated evaluation and demonstration, and enhance the potential value of enterprises through M&A, so as to realize the purchase value. A successful cross-border M&A project spends 60%-70% of its time on strategic planning. The M&A strategy is formulated on the basis of these investigations and reviews. It is necessary to fully understand the business and resources of the target enterprise engaged in mergers and acquisitions. Finally, the economic strength, technical level, market share and other factors of both parties are comprehensively compared with the external factors such as economy, politics, law and culture of the countries where both parties are located, so as to understand the integration difficulty of both parties. Let clear goals run through all attributes. Before considering any transaction, senior management needs to formulate a set of guidelines for future growth, which is the first step to ensure the smooth progress of the merger. This policy not only includes the long-term strategic planning in the usual sense, but also determines the list of major issues in great detail according to the strategic objectives of enterprise integration and merger, organic increase of investment and establishment of alliance relations. The guideline provides a basis for enterprises to choose what type of transaction, and establishes a system of "judging right or wrong according to the target", thus ensuring a convincing business analysis of each transaction intention. With this set of standards, the CFO and the M&A team can objectively evaluate the prospects of the transaction. If a transaction meets the growth criteria, the value it brings will exceed its own value. If the two don't match, or the alarm signal is terrible enough, then the experienced M&A team should be ready to quit the transaction. Prepare internal resources for M&A After the M&A strategy is formulated, the internal M&A team should be led by the company leaders and the leaders of relevant departments. M&A team should be familiar with the knowledge of law, accounting, finance and other aspects involved in the evaluation process, so as to ensure rapid response and decision-making, as well as smooth external contact. Fully understand policies, people's feelings and legal environment. Before foreign investors carry out M&A activities in China, they should first consider whether M&A activities conform to China's industrial policies. These industrial policies may change over time. Therefore, when foreign investors are going to buy stocks in China, they should first find out whether there are access restrictions in this industry, otherwise they may run the risk of not getting approval from the examination and approval authorities after spending a lot of energy. In addition, we should also consider market competition audit, mainly anti-monopoly audit. For example, the case of Coca-Cola's acquisition of Huiyuan died because it failed to pass the anti-monopoly review of the Ministry of Commerce of China. Multinational companies should also abide by the laws and regulations of China and respect the national feelings of the people of China, so as to reduce the resistance of M&A in China. In China, not every enterprise is suitable for M&A. Some enterprises did not strictly examine the value of the assets actually acquired and the matching degree between their own capabilities and strategies, but came to the negotiation table of M&A because of their cheap prices or impulsiveness. Enterprises should evaluate and combine their own structural capabilities, including the analysis of internal acquisition team formation, their own strategy, operation and financial capabilities, and measure the future development trend, business opportunities, leading figures and risks of the company and its industry, so as to judge whether M&A in China can really bring added value to enterprise transactions. Second, the key steps of M&A trading The whole process of finding an experienced person to lead M&A should be led by an outstanding leader. It is wrong to rely solely on external consultants. Leaders should be very upright, have good communication skills and correct incentive mechanism. This is conducive to effectively organizing and leading the merger, solving various problems in the merger in time, and improving the success rate of enterprise merger. Find the M&A target, identify and classify it according to the required characteristics, and list the problems and shortcomings. We should sort the primary M&A objectives according to the attributes that enterprises attach importance to, make a reasonable valuation, and list the existing problems and shortcomings respectively. It is very important to conduct due diligence in the process of mergers and acquisitions. It is best to do it by the potential president who will become a new purchasing company. He should pay attention to debts, accounts receivable, corruption, taxes and labor contracts, and the prohibition of competition of the original owner, and prepare feasible plans for the merger and acquisition plan. The acquirer's due diligence on the target company is related to the success or failure of the whole merger. Many failed foreign acquisitions are related to ignoring risks in due diligence. In the process of M&A, both sides are in the position of information asymmetry. The acquirer takes greater risks, and thorough and meticulous due diligence can minimize the risks of the acquirer. Creating a fair deal requires honesty and transparency, clearly setting reasonable prices for sellers and creating value for employees who stay in the new company after the merger. Many enterprises deal with M&A at all stages like a relay race: from the board of directors to the negotiation team, to the person in charge of the integrated planning project and then to the managers of various departments, the work is passed down from generation to generation. This method not only prolongs the time of M&A, but also makes the newly merged enterprises in an impetuous market, making it difficult to solve problems at an early stage-these problems will appear at a later stage-which will further delay the process and make the work more difficult. It is best to adopt a parallel approach. If possible, a large shadow team will enter as soon as possible to gain an in-depth understanding of the daily operation of the acquired object. Each team member can communicate freely with other team members or insiders on a regular basis. This kind of treatment needs more resources, time and personnel to participate. But the results it produces deserve extra efforts. Or pay close attention to enterprises in the process of long negotiations and waiting for government approval. Third, avoid the trap in the process of integration, and lack systematic and feasible methods to realize the synergy after merger and acquisition. Foreign companies are ready to set ambitious comprehensive coordination goals, but they lack practical and systematic methods to adapt to the business environment in China. According to our experience, the following are the typical reasons why we can't achieve collaboration: systems and reports can't communicate and connect with each other, and the responsibilities of collaborative projects are not clear. The employees and workers of both sides are treated differently, and the project investment far exceeds the budget. There is no plan to deal with the crisis, and there is no full understanding of the different needs of shareholders in China. Compared with western partners, China companies usually have more internal related shareholders, because there are complex equity institutions and legal entities, complex central government relations, family members, relatives, business partners and colleagues. Some important shareholders are not obvious in the M&A transaction stage, but they may eventually bring unexpected surprise effects in the integration stage. Failure to understand or pay attention to the interests of these key shareholders will lead to expensive costs and even unpredictable litigation. Lack of understanding of cultural differences and failure of cultural integration are often one of the main reasons for the failure of mergers and acquisitions. Due to the huge differences between Chinese and western corporate cultures, this problem is particularly prominent in China. Foreign management also pays insufficient attention to cultural integration, or doesn't know how to choose the appropriate assimilation and integration methods. We must consider drawing lessons from the following important activities. Multinational companies that copy western business practices to China companies without considering localization try to standardize business models and processes between different regions, and hope to fully apply their management systems to China companies acquired through mergers and acquisitions, but rarely localize them. According to western standards, assuming that the skills and thinking modes of local management teams and employees are smoothly integrated, the trend of collaboration can be expected, and western companies usually need local employees to quickly adopt western management systems and processes. However, due to the lack of planned training and staff guidance, most China locals know little about western culture and education, and it is usually difficult for them to adapt to these new ways of thinking and behavior in a short time. Radical plans that do not take into account the abilities and ways of thinking of local teams usually lead to confusion, frustration or friction. More importantly, different interpretations of the same strategy may lead to poor performance. Therefore, foreign companies should understand that it takes time and great patience to establish a stable business in China, and they should educate local employees through systematic training, teaching and formal and informal guidance. China employees who trust the integration process very much but ignore people's problems may be confused because of language barriers and different ways of working and communicating. The typical reaction of employees to integration is shown in Figure 7. In the integration stage, a good manpower management plan should be started and implemented as soon as possible. Moreover, in the governance environment of "one-person management" in China, it is very important to retain key personnel, which is usually a strong leader, but it is a weak middle management team. These key people usually have good relations with the government and suppliers, and also hide information from the company. It is very important to keep them after the merger or at least during the transition period to maintain the stability of the company and obtain the planned synergy.