The Financial Risk Prevention Of Transnational Merger And Acquisition Of Chinese Enterprises

The transnational mergers and acquisitions of Chinese enterprises are foreign direct investment activities whose characteristic is that the state-owned enterprises is a pioneer, and the main object of merger and acquisition is manufacturing, energy industry. In many aspects of power driving such as the overall economic strength of Chinese enterprises, the accumulation of international business management experience and the pressure of RMB appreciation after the financial crisis in the United States of America, in order to expand their own survival and development space, optimization of the international allocation of resources, play the advantages of scale economy, transnational merger and acquisition events are expanding in the number and size constantly. However, transnational merger and acquisition is a double-edged sword, that can bring the business benefits to the enterprise, at the same time, there are also a lot of hiding risks in which the financial risk in transnational mergers and acquisitions is the comprehensive report in the value of all kinds of merger and acquisition risks, plays a decisive role in the merger and acquisition of enterprises.Transnational merger and acquisition of Chinese enterprises is more challenging and risky than domestic M & A due to the political, economic, legal, cultural and environmental changes. This paper systematically studies various risks based on the existing literature, according to the enterprise transnational merger and acquisition process encountered. The risks in the process of transnational M & A are classified: objective enterprise valuation risk, financing risk, payment risk, foreign exchange risk, integration risk and operating risk. This classification can make us recognize the financial risk clearly that encountered in each stage of transnational merger and acquisition, take corresponding measures to prevent it targeted with its forming reasons.This paper based on the theoretical research, combined with the historical financial data from the XX Group with a total of eight years around the merger, using financial risk evaluation index system and risk prediction model, verifies the financial risk of this historical stages, looking forward to find a reasonable evaluation criteria, undertakes some useful discussion for setting up financial risk evaluation system in the future. But because of existing some difficulties of getting various kinds of data values, maybe there is deviation when defining the analysis indexes. At last, combined with the former analysis of forming reason of transnational financial risk of Chinese enterprises, this paper puts forward the concrete measures to guard against financial risks.This paper stands in the view of transnational merger and acquisition of Chinese enterprises, systematically analyzes the financial risks of transnational merger and acquisition. Systematically elaborating the risks that met in the process of transnational merger and acquisition according to the process of transnational merger and acquisition activity, this is also a big characteristic of this paper studying.The risk research of transnational merger and acquisition of Chinese enterprises is a systematic project, financial risk on guard is only one subsystem, to avoid the risk of transnational merger and acquisition of Chinese enterprises, we need to constantly perfect the risk prevention system of Chinese transnational merger and acquisition drawing lessons from foreign advanced management experience.