Evaluation And Prevention On The Cross-Border M&A Of Chinese Enterprises

With the development of globalization and the Fifth Cross-Border Mergers &Acquisitions (abbreviated as M&A) Trend throughout the world, cross-border M&A is changing the world economy in a faster and wider way. As enterprises from one of the fastest-growing economy in the world, Chinese enterprises have actively participated in this trend. Some of them have got success in their cross-border M&A transactions.However, M&A is a kind of market-oriented business practice. So there are potentially huge risks under the significant expected benefits. The targeted enterprise of M&A transaction is a complex integration of dynamic assets including technology, personnel, equipment and market factors. Furthermore, the cross-border M&A will face many other external changes including political, economic, legal and cultural differences and risks. Apart from that, some Chinese enterprises that have participated in cross-border M&A, lack relevant experience in overseas investment and operations, and inevitably bring with low successful percentage. Therefore, based on practical needs of Chinese enterprises'cross-border M&A activities, it is a pressing task to analyze potential risks in the process of cross-border M&A and give relevant prevention and policy advices on those risks. These advices are expected to promote rational and scientific cross-border M&A activities, and cultivate more competitive Chinese transnational enterprises.This paper starts from analysis on current situation of Chinese enterprises'cross-border M&A and some problems arise from. With reference to case study of Chinese enterprises'cross-border M&A risks, this paper concludes these cross-border M&A risks to three phases and supplies two risk evaluation measures, one in a qualitative way and the other in a more quantitative way. In analysis of the quantitative risk evaluation model, a simulative case study is used to prove the adaptability of AHP-GRAP Risk Evaluation Model. Finally, the paper put forward several risk prevention countermeasures for Chinese enterprises in microcosmic consideration and policy advices for Chinese government in macroscopical consideration.