China's Telecom M & A Risk Study

Under the new-economic background, M &A has been paid attention to by more and more telecom enterprises as a resultful method for enterprise expanding. "Economies of scale advantage" represented by M&A makes these enterprises, which ever were suffered from rapidness in technology and competition in market, have to change their original ideas that corporation' s growth only depends on self-accumulation. In recent years, Chinese telecom operation enterprises have taken several M&A activities continuously home and abroad to gain potential profit and cover more geographic business scale. But practice has proved that M&A as a systems engineering is numerous and complicated, and lots of risks exist in it. And it was just because many companies were not cognizant of risks and didn't take any actions to deal with them, few M&A deal was successful. So how to rightly identify and deal with risks is the key to success of M&A.However, domestic ones' M&A just started and in the phase of exploration. Because M&A has something to do with problems such as capital operation and merger and these companies lack of overseas invest experiences, the probability of success was low and risks were very high. Thus, our telecom enterprises are facing up big challenges of M&A risks.Based on industrial economic theory and M&A theory, this thesis in-depth analysis the characteristics of the telecom industry, trends and the factors promoting the M&A. From the large number of case studies, summarized risk characteristics, risk factors and risks, accordingly further risk identification and evaluation. Then study and explore the key risk in empirical way. Finally, put forward some telecom M&A risk prevention recommendations.The full thesis is divided into five parts as following. Part I: Aggregate related metric theories in M&A and risk measurement; Part II: From theory, the paper study telecom industry, and concluded telecom M&A motivation. Then show the analysis method with risk characteristics systemicly and phasely ; Part III: From aspects of the root,characteristics and manifestations in-depth analysis the Chinese telecom M&A behaviors; Part IV: Study the capital operation risk in cases studying way with some telecom enterprises' financial data and annual reports data; Part V: Put forward some risk prevention recommendations according risk prevention strategy.From the results of study and the course of analysis, two purposes are expected to reach by the paper: one is to help decision-makers of telecom enterprises to think M&A rationally; the other is to give some revelations on thought and method in risk analysis of M&A of Chinese telecom enterprises.