Not just hard work, but also smart work is needed to make first outright acquisition of a global brand by Chinese firm a success

Making a large-size merger or acquisition work is one of the toughest strategic and organizational challenges for any company. Just look at the experiences of Shanghai Auto with Ssangyong Motor in South Korea, Lenovo with IBM's PC business, TCL with its acquisitions in Europe, Daimler with Chrysler, and Ford Motor Company itself with Volvo.

The problem generally is not one of weak strategic logic. As with Geely Holding's acquisition of Volvo, the strategic logic is often sound. What does happen, however, is that corporate leaders routinely over-estimate the size of the potential synergies and, once the honeymoon is over, their ability to realize the synergies. Based on the research and consulting experience with cross-border mergers of our business school INSEAD, we present five guidelines that Li Shufu, Geely's chairman, and his team must keep in mind in order to increase the odds for their bet in acquiring Volvo to pay off.