Puzzles Behind Emerging Multinationals' Acquisitions Multinational enterprises from emerging economies (EMNFs) have recently emerged as a new breed of acquirers around world. In comparison with acquirers from developed economies, two unique and interesting patterns have emerged. First, during the preacquisition phase, EMNEs often bid higher for certain assets, especially those in developed economies. Second, during the postacquisition phase, EMNEs tend to allow acquired targets in developed ecorurnies significant autonomy as opposed to centralized, tight integration. However, when venturing to other emerging economies, EMNEs do not typically bid higher and do not generally grant significant autonomy to acquired targets. As a result, two puzzles have emerged: (I) Why do EMNEs often bid higher for acquisition targets in developed economies? (2) Why do they often grant significant autonomy to such targets? Eagerness to tap into strong cornplementarity is likely to rtutivate emerging multinationals to bid higher. Tata Motors' 2008 acquisition of Jaguar Land Rover (JLR) frotn Ferd is a Case in Bint. At $23 billion, the all-cash deal was costlyone of top five largest cross-border acquisitions undertaken by Indian firms. While Tata Motors had a leading position in Iow- end vehicles in Irudia, JLR's two konic brands and advanced technology complemented Tata Motors' strengths. Such strong complementarity is typical between acquirers from emerging econMnies and targets from developed Ihring the preacquisition phase. a number of stakeholders in host country can jeopardize the deal. Externally, politicians can weaponize the issue under the Cloak Of nationalism, the media can cause an uproar against "foreign takeover," and regulators can scuttle the deal citing elusive criteria such as national security concerns. For example, in 2006, Vale of Brazil met severe resistance when attempting to take over Inco, one of Canada's largest mining companies. This acquisition. according to local politicians critical of deal, would allegedly "undermine Canada's status as a force in the mining industry," resulting in "the hollowing out of Canadian mining." Internally, target firm managers and shareholders need to be convinced that EMNEs are the most suitable acquirers. Although bidding priC are important, target firm managers and shareholders often carefully weigh the match of the combination potential and organizational rapport between targets and acquirers. If emerging acquirers' skills are viewed as too poor and legitimacy aspects as too low, they are not likely to get the nod. To overcome such resistance, enterging multinationals typically deploy two tactics. The first is to provide a more lucrative offer by enhancing the acquisition premium. In the Vale-Inco case, Vale proposed an all-cash Offer Of $18 billion and the assumption of Sl billion in debt, totaling a whopping $19 billion. In 2016, China's electronics giant Midea offered to buy Kuka, otw of Germany's most innovative engineering companies, for $5 billion, a premium close to 60%. The primary goal was to gain access to Kuka's robotics technologytechnology so advanced that Germany's deputy chancellor made a rare public appeal for alternative German and European bidders so that the technology would be kept out of Chinese hands. However, with a premium so high, no one else came forward. Second. granting targets significant autonomy is part of a crucial effort to soften target resistance and eventually reap benefits from these deals. Many emerging acquirers embark on a "high road" strategy in which acquirers deliberately allow acquired target companies to retain autonomy, keep t}w top management intact, and then gradually encourage interaction between the two sides. The high road obviously facilitates more rapport between the two sides. Many acquirers from developed economies use the "low road" (fast, aggressive integration), which often results in poor postacquisition performance. Therefore. many emerging acquirers' high road approach is preferred by targets.