The Research On The Cross-border Merger And Acquisition Risk Of Chinese Mining Enterprises

China is currently in the industrial era during which a lot of mineral resources are rapidly consumed., and this period will last for a long time. Out of the country's economic development and enterprises'sustainable development, going overseas to participate in cross-border M & A is Chinese Mining enterprises'inevitable choice. The prospects are substantial but the road is not smooth. CNOOC Ltd. missed the U.S Unocal oil company, Chinese Minmetals Group's plans for acquisition of Canadian Noranda mining company came to nothing, CHINALCO (Aluminum Corporation of China)'s contract of $19.5 billion's injection to Rio Tinto had been turned up by the latter. All these are instances which shows M & A transactions were strangled in the cradle. Although Chinese enterprises succeed in overseas M & A transactions, it never means that these will all be successful M&A. If Chinese corporations couldn't effectively integrate the acquired business after taking it over,, its operation will be in trouble.China's Overseas M & A is still in the exploratory stage since it started lately. What's more, the domestic and international environment is variable and the M&A itself is complicated. Therefore, China's corporations will encounter kinds of risks and obstacles during cross-border M & A, such as political and legal obstacles, strategic decision-making errors, incorrect valuation for target enterprise, lack of financing channels and payment, cultural conflict and operation risk after acquisition etc.The prevention of risk is directly related to the success of cross-border M&A, so mining corporations should fully predict risk and purpose comprehensive preventive measures during cross-border M&A. First of all, formulate strategic planning for M&A and conduct due diligence to target company so as to know both ourselves and target well. During the transaction should negotiate flexibly, actively expand the financing channels and arrange payment reasonably, trying best to not to increase financial pressure. Mining corporations still can not sit back and relax after acquisition, developing integration plan, communicating timely and resolving cultural conflicts should be on the agenda. Meanwhile, financial instruments can be applied to resist the risk of price fluctuation. In addition, in order to keep in line with the strategy of going out for mining enterprises, the Government should supply more convenient management, create a relaxed environment .on institutional level.Finally, fuzzy comprehensive and AHP evaluation method was introduced to quantify the risk of Minmetals Nonferrous Metals Co. mergering OZ. The model's analysis result is consistent with realistic situation, showing that the political risk of the merger is the main risk. decision-making risk and integration risk are also have a great impact on the success or failure of M&A. Minmetals Nonferrous Metals Co. successfully obtaining part of OZ's property had left some experience for later mining enterprises that are interested in cross-border M&A: fully preparation before the merger, flexible negotiation strategy, responding to obstacles actively. While adequate human and financial resources are essential to the success of the protection.