Risk Analysis And Prevention In The Transnational M&A Of Chinese Private Enterprises

In the last 10 years of the 20th century, two remarkable trends appeared in the world economy. One is economic globalization. The other is the extension of M&A by transnational corporations from home to abroad, which has led to the M&A waves of enterprises globally. In this situation, the transnational M&A of Chinese enterprises has attracted the eye of the world. After being a member of WTO, Chinese private enterprises are facing double competition from other domestic enterprises and foreign organization dramatically. For broader growth space and richer international resources, Chinese private enterprises have to implement the oversea M&A actively. And then they can survive the challenge.Practice has proved that transnational M&A is an important channel of the rapid accumulation of capital, possession of resource and expansion of market. In the same time, Chinese private enterprises will face financial risk, information risk, politics and law risk, integration risk and other challenges. These risks will show up in the pre-M&A, M&A trade period and integration period. In front of these obstacles, Chinese private enterprises should exercise proper method to keep away from risks and implement risk management. By building international risk management network, risks can be found in time and diversified in the end. Besides, the government should also play its role to build good political relationship with other countries to cooperate with enterprises.This article puts emphasis on analyzing the risk prevention, and gives some suggestions. This article uses the methodologies like quantitative analysis, qualitative analysis, theory analysis, positive analysis and so on. In the beginning, the article made a definition of these term: private enterprise, transnational M&A , and risk. Also point out the differences between risk management and risk prevention, which is the main point of this article.Then, the article introduces some relative theories, including the course of the risk analyzing , risk evaluating theories and research status about risk prevention in home and abroad. Based on these theories, the articles shows a set of ways of risk prevention to minimize the risk in transnational M&A.The third part analyses the status of the development of transnational M&A by private enterprises. Chinese private enterprises are still in the initial stage, as a result of...