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Exploring the Financial Risks of Corporate Cross-Border Mergers and Acquisitions: Case Study based on Geely's Acquisition of Volvo

Author(s)

Xinyu Lai*, Lin Wang

Affiliation(s)

Jiangxi Normal University, Nanchang, Jiangxi, China *Corresponding Author.

Abstract

Geely Group's acquisition of 100% stake in Volvo and related assets in 2010 triggered global attention and promoted a new wave of China's overseas M&A activities. This study explores the financial risks in corporate M&A and their management strategies, and takes Geely's acquisition of Volvo as a case study for in-depth analysis. Through the background and significance of Geely's acquisition of Volvo, the process, significance, performance analysis and impact of Geely's acquisition of Volvo are explored in detail by adopting the case study method and SWOT analysis, and the financial risks are identified and assessed by combining relevant theoretical frameworks. The research results show that the financial risks faced by Geely's acquisition of Volvo mainly include valuation risk, financing risk, payment risk and integration risk. In the conclusion section, it is emphasized that the recognition and assessment of financial risks are crucial when conducting cross-border mergers and acquisitions of companies. Companies should conduct due diligence and risk assessment cautiously and develop effective risk management strategies to ensure the successful implementation of cross-border M&A transactions. Before carrying out cross-border M&A activities, companies should integrate the concepts of strategic management, financial risk management and corporate governance into all aspects of cross-border M&A, and automobile companies should obtain the support of domestic and foreign governments, broaden the financing channels of cross-border M&A, and pay attention to post-merger and acquisition integration measures in order to realize their long-term strategic goals.

Keywords

Corporate Mergers and Acquisitions; Financial Analysis; Financial Risk

References

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