Chinese Iron And Steel Enterprises Overseas M & A Risk Study

From the current situation of domestic and international economic, the reasons that pro-mpt China's steel enterprises go to abrad for transnational m&a are:as the high-speed development of the industrialization and urbanization,China has a great demand for ste-el; Compared with huge demand, China's domestic iron ore resources are not rich, and the exploitation is difficult,the grade of it"s characters is low; The international iron ore prices surged as the shipping expenses surged, aslo the import costs increased greatly; The international iron ore giant monopoly the market of the world iron ore supply, fixing the price of international iron ore, and China fought and lost repeatedly in the internatio-nal iron ore negotiations. Be driven by the above reasons, China has finally made the ch-oice of " transnational m&a ".As the risk the steel enterprise which is about to go to abroad have to face,there are risk basised on enterprise itself and risk basised on country. And,the risk basised on enterprise contains dominant risk,recessive risk and surviving risk. The risk basised on country,which steel enterprises which want to go abroad must face,contains political risk,risk caused by host security situation and risk caused by the non-perfect legal sys-tem.For those steel enterprises in China,there are some characters which belong to the steel enterprises itself.As the characters the steel enterprisas have,they have to face other risk caused by those characters.It is a important task for the steel enterprises in China to deal with those risk which they have to face.For the steel enterprises in China,they should let excellent institutions to help them investigate the enterprise they want to perchase,let the enterprise they want to perchase make promise for the reality of the information which they disclosed,and they must make a compasation if the information is faulse,and it is a good ideal for the steel enterprises in China to induce PICC to deduce the risk the steel enterprises which want to go abroad afford; besides,steel enterprises can not perchase others when they can not afford,can not perchase those enterprises which are not chip,collect money in share market,collect money in those country which the capital rate is low and the forest rate fluctuate in a acceptable way,and perchase enterprises in zhe same country, this merthords can deduce the risk caused by capital the steel enterprises borrowed, we can let investigate institution to go to the enterprise which we want to perchase,and do some investigation in oder to deal with the risk caused by asset evaluation, we should make scientific assessment for retired worker conditions and make reasonable choice to avoid excessive retired worker risk, the measures introduced above can deal with rec-essive risks; Communicate with the target enterprise and let investigate institution to go to the target enterprise in advance,learn the management system are the measures to deal with management tisk; Follow the market principle is the measure to deal with administrative tisk; establish the evaluation mechanism for workers is the key to prevent scale econ-omic risk; communicate and exchange is the methord to overcome cultural risk; fu- rther study the law in the host is the way to prevent legal risks.For the risk basised on country, it is a good idea for the steel enterprises which want to go abroad to invest in those country which is rich in iron ore resources,have no vio-lence, have a pefect legal system and build company which produce iron in order to deal with political risk, we can aslo introduce PICC and let the host make a promise in order to deal with risk caused by voilence in host, we must reasearch the law of the host and introduce PICC in order to deal with the risk caused by the non-perfect law system in host.For the risk cansed by the characters the steel enterprises have, we can transfer pro-duction capacity to those countries which are rich in iron ore resource, and we can aslo perchase the shares of those mining enterprises gradually in order to deal with the risk.