Chinese OFDI in Italy: post-acquisition integration

Abstract

From one of the largest recipients of foreign direct investment, China has now become one of the main active investors in foreign countries. As an emerging market and a latecomer in the global stage, its internationalization mode differs significantly from that of developed countries. China’s outward foreign direct investment (OFDI) has developed quickly in recent years, and European countries, including Italy, are considered very attractive by Chinese investors, whose preferred mode of entry is Mergers and Acquisitions (M&As). However, due to the high failure rate of Chinese M&As, several scholars have been trying to explain the reasons why Chinese acquisitions often do not lead to win-win situations which will be beneficial to both parties. The purpose of my thesis is to analyze and explain how a well-implemented post-acquisition integration is a key driver of the success of M&A. In the first chapter I will briefly explain the characteristics of Chinese MNEs internationalization process (push and pull factors, motivations, mode of entry) and the government actions to support and promote Chinese companies’ foreign investments (“Go Out” policy, “One Belt One Road”, “Made in China 2025”), in order to better understand their expansion into Europe and in particular in Italy. In the second chapter I will give an overview of the theoretical literature on post-acquisition integration: the major frameworks proposed by the scholars and the main issues related to socio-cultural integration, as culture, time, communication and human resources. In the final chapter I will explain some peculiar characteristics of Chinese culture that influence their business activities; then I will focus on some of the major problems that Chinese companies face in managing overseas M&As, through the analysis of some case studies of Chinese acquisitions in Italy.