INTRODUCTIONAccording to statistics from the Chinese Ministry of Commerce, in 2013, Chinese investors made overseas direct investments in 5,090 companies in 156 countries and regions. By the end of 2013, China's non-financial overseas direct investment amounted to US$525.7 billion. The number of international acquisitions by Chinese companies has increased significantly in recent years. Traditionally, businesses viewed exploiting economies of scope and scale or exploiting market imperfections as a dominant means of achieving competitive advantage. However, due to the forces of globalization that have pushed economies to become more integrated, businesses are realizing that these traditional means of gaining competitive advantage now have limited profitability. As a result, mergers and acquisitions have become an increasingly popular strategic choice for organizations (Nahavandi and Malekzadeh, 1988; McEntrie and Bentley, 1996; Zhu and Huang, 2007). On March 28, 2010, Chinese automaker Zhejiang Geely Holding Group acquired Volvo Car Corporation for $1.8 billion (NYDailyNews, 2010). Geely is known as a low-cost car manufacturer and the acquisition of Volvo will allow them to access Volvo's vast experience, gain advanced technology and management know-how, brand image and a distribution network. In fact, through the acquisition, it will help Geely better compete with other automakers globally and allow Volvo to succeed in the Chinese auto market and start making profits. COMPANY PROFILE Hejiang Geely Holding GroupZhejiang Geely Holding Group, privately owned by a Chinese automobile manufacturer founded in 1986. Geely started its automobile manufacturing business in 1997...... middle of paper...... Investment agencies must purchase their car fleets from local car manufacturers. As Volvo is not considered a local automaker, this excludes them from a potentially $15 billion market (Yan, Ken). In contrast, MG, a British sports brand that is owned by the Shanghai Automotive Industry Corporation, does not. doesn't seem to have this problem that Volvo is facing. The difference in treatment by the Chinese government could be explained by the fact that MG is fully integrated into SAIC, while Volvo is separate from Geely. The factors that affect how the Chinese government classifies a company appear to depend on where the company is incorporated rather than where the majority shareholders are based (Yan, Ken). So, to be fully considered a Chinese company, Geely would have to absorb all of Volvo's assets and close the foreign-registered company (Yan, Ken).