1. Why have firms from emerging economies such as China and India significantly expanded their international footprint?
2. Why do they focus on industries related to their existing areas of excellence?
3. Why are they interested in using acquisitions as a mode of entry?
4. How successful (or terrible) have their acquisitions been?

TABLE 9.1 Cross Border Acquisitions Undertaken by Chinese and Indian MNEs Chinese MNEs Indian MNEs Top target industries Energy, minerals, and mining High-tech and software services Top target countries Hong Kong United Kingdom Top target regions Asia Europe Top acquiring companies State-owned enterprises Private business groups involved % of successfully closed 47% 67% deals SOURCE: Extracted from S. Sun. M.W. Bang, B. Ren, & D. Yan. 2012 A comparative ownership advantage framework for cross-border MaAs The rise of Chinese and indian Muses, Journal of World Business, 47 4-16. Overall, China's stock of outward foreign direct Investment (OFDD) (1.7% of the world- wide total) is more than three times that of India (0.5%). One visible similarity is that both Chinese and Indian MNEs seem to use acquisitions as their primary mode of OFDI Throughout the 2000s, Chinese firms spent US$ 130 billion to engage in acquisitions over- seas, whereas Indian firms made acquisition deals worth US$60 billion. MNEs from China and india target industries to support and strengthen their own most competitive industries at home. Given China's prowess in manufacturing, Chinese firms' overseas acquisitions primarily target energy, minerals, and mining-crucial sup- ply industries that feed their operations at home. Indian MNEs' world-class position in high-tech and software services is reflected in their interest in acquiring firms in these industries. The geographic spread of these MNEs is indicative of the level of their capabilities Chinese firms have undertaken most of their deals in Asia, with Hong Kong being their most favorable location. In other words, the geographic distribution of Chinese acquisi tions is not global; rather, it is quite regional. This reflects a relative lack of capabilities to engage in managerial challenges in regions distant from China, especially in more- developed economies. Indian MNEs have primarily made deals in Europe, with the UK as the leading target country. For example. acquisitions made by Tata Motors (Jaguar Land Rover [JLR]) and Tata Steel (Corus Group) propelled Tata Group to become the number- one private-sector employer in the UK. Overall, Indian firms display a more global spread in their acquisitions, and demonstrate a higher level of confidence and sophistication in making deals in developed economies. From an institution-based view, the contrasts between the leading Chinese and Indian acquirers are significant. The primary players from China are state-owned enter- prises (SOEs), which have their own advantages (such as strong support from the Chi- nese governmenty and trappings (such as resentment and suspicion from host-country governments). The movers and shakers of cross-border acquisitions from India are pri- vate business groups, which generally are not viewed with strong suspicion. The lim- ited evidence suggests that M&As by Indian firms tend to create value for their shareholders. However, acquisitions by Chinese firms tend to destroy value for their shareholders-indicative of potential hubristic and managerial motives evidenced by empire building. Announcing high-profile deals is one thing, but completing them is another matter. Chinese multinationals have a particularly poor record in completing the overseas acqui- sition deals they announce. Fewer than half (4796) of their announced acquisitions were completed, which compares unfavorably to Indian MNEs' 67% completion rate and to a global average of 8096-90%% completion rate. Chinese MNEs' lack of ability and experi- ence in due diligence and financing is one reason, but another reason is the political back- lash and resistance they encounter, especially in developed economies. The 2005 failurefirm. The size of your firm will double after this acquisition and it will become the largest in your industry. On the one hand, you are excited about the opporto nities to be a leading captain of industry and the associated power, prestige, and income (you expect your income to double next year). On the other hand, you have just read this chapter and are troubled by the 70% M&A failure rate. How would you proceed? CLOSING CASE 9.1 Emerging Markets: Emerging Acquirers from China and India Multinational enterprises (MNEs) from emerging economies, especially China and India, have emerged as a new breed of acquirers around the world. Provoking "oohs" and "ahhs," they have grabbed media headlines and caused controversies. Anecdotes aside, what are the patterns of these new global acquirers? How do they differ? Only recently has rigorous academic research been conducted to allow for systematic compar- ison (Table 9.1).of CNOOC's bid for Unocal in the United States and the 2009 failure of Chinalco's bid for Rio Tinto's assets in Australia are but two high-profile examples. Even assuming successful completion, integration is a leading challenge during the post-acquisition phase. Acquirers from China and India have often taken the "high road" to acquisitions, in which acquirers deliberately allow acquired target companies to retain autonomy, keep the top management intact, and then gradually encourage interaction between the two sides. In contrast, the "low road" to acquisitions would be for acquirers to act quickly to impose their systems and rules on acquired target companies. Although the "high road" sounds noble, this is a reflection of these acquirers' lack of international management experience and capabilities. From a resource-based view, examples of emerging acquirers that can do a good job in integration and deliver value are few. According to the Economist, Tata "worked won- ders" at JUR by increasing 30% sales and keeping the factory at full capacity. This took place during a recession when European automakers were suffering. According to Bloom berg Businessweek, Lenovo was able to "find treasure in the PC industry's trash" by turn ing around the former IBM PC division and using it to propel itself to become the biggest PC maker in the world. In ten years it grew from a US$3 billion company to a US$40 billion one. However, Lenovo knew that worldwide PC sales were going down, thanks to the rise of mobile devices. In response, it recently bought "the mobile phone industry's trash"- Motorola Mobility division-from Google and endeavored to leverage the Motorola brand to become a top player in the smartphone world. This deal quickly made Lenovo the world's third best-selling smartphone maker, after Samsung and Apple. Sources: 1. BBC News, 2014, Lenovo completes Motorola takeover after Google sale, October 30: www. bbc.co.uk; 2. Bloomberg Businessweek, 2014. Jackpot! How Lenovo found treasure in the PC industry's trash, May 12: 46-51: 3. Y. Chen & M. Young, 2010, Cross-border M&As by Chinese listed companies, Asia Pacific Jour nal of Management, 27: 523-539: 4. Economist, 2012, The cat returns, September 29: 63 5. S. Gubbi, P. Aulakh, S. Ray. M. Sarkar, & R. Chittoor. 2010. Do international acquisitions by emerging economy firms create shareholder value? Journal of International Business Studies. 41: 397-418: 6. 0. Hope. W. Thomas, & D. Vyas, 2011. The cost of pride, Journal of International Business Studies, 42: 128-151; 7. S. Lahiri, B. Elango, & S. Kundu, 2014, Cross-border acquisition in services, Journal of World Business, 49: 409-420; 8. S. Lebedev, M. W. Peng, E. Xie, & C. Stevens, 2015, Mergers and acquisitions in and out of emerging economies, Journal of World Business (in press); 9. S. Sun. M. W. Pang. B Ren, & D. Yan. 2012. A comparative ownership advantage framework for cross-border M&As: The rise of Chinese and Indian MNEs. Journal of World Business. 47: 4-16 10. Y Yang, 2014. "I came back because the company needed me." Harvard Business Review. July: 104-108 Questions 1. Why have firms from emerging economies such as China and India significantly expanded their international footprint? 2. Why do they focus on industries related to their existing areas of excellence? 3. Why are they interested in using acquisitions as a mode of entry? 4. How successful (or terrible) have their acquisitions been