Risk And Prevention Of Cross-border Mergers And Acquisitions Of Chinese Enterprises

In the 21 century, the trend of globalization is more obvious. Theproblems raised by globalization bring threats to the development of ourworld. In this situation, the cross-border Merger and Acquisition (M&A) ofChina has attracted the eye of the world. After being a member of WTO, ourenterprises are facing double competition from other domestic enterprises andforeign organizations dramatically. For broader growth space and richerinternational resource, Chinese enterprises have to implement the overseaMerger and Acquisition actively. And then they can survive the challenge.Otherwise, there are several factors to explain this trend. They are the morepowerful Chinese enterprises, national resource strategy and the change ofChinese government's attitude to FDI.Chinese enterprises will face financial risk, information risk, politics andlaw risk, integration risk and other challenges. These risks will show up in thepre-Merge and Acquisition, M&A trade period and integration period. In frontof these obstacles, domestic enterprises need to exercise proper method tokeep away from risks and implement effective risk management. By buildinginternational risk management network, risks can be found in time anddiversified in the end. Secondly, the government should also play its role tobuild good political relationship with other countries to cooperate withenterprises.With real examples, this article tries to give managers some advise toguard against the risks in the oversea Merger and Acquisition.