The Internationalization Process of EMNE and Strategic Positioning of Cross-border M&As

A Case Study of Haier and Sanyo Electric

Abstract

Cross-border M&As by emerging market multinationals (EMNEs) in advanced countries, the purpose of which is to acquire strategic assets, are frequently witnessed in recent years. However, when EMNEs have grown more internationalized through various FDI activities prior to cross-border M&As, the aim of M&As and the way of utilizing acquired assets will change along with improvements in the competitiveness of EMNEs. By observing over time, this paper aims to analyze how the strategic positioning of cross-border M&As changes in the internationalization process of EMNEs.

A case study on the acquisition of Sanyo’s white goods units by Haier, the Chinese home appliance giant, was conducted. The results suggest that, despite the strategic intent of using cross-border M&As as springboard for gaining competitiveness, the way how acquired assets are utilized could be different from it was planned, which means the role of acquired companies might change. The main reason is that during the internationalization process, EMNEs have caught up with, or even have surpassed some AMNEs that were once considered as benchmarks. In other words, role reversal has occurred between EMNEs and AMNEs. In this instance, the technological resources of acquired firms are shared with other regional subsidiaries through the headquarter of EMNEs, and by doing so, EMNEs could leapfrog to transnational companies.