Research On Risk Management Of China's Resource-based Enterprises' Overseas M & A

Industry is the foundation of the national economic:energy and minerals are always compared to the blood and food of industry. which are also considered to be the strategic resources around the world. With the economic development, all countries maintain strong need for resource-based commodities, especially the developed countries and new emerging economies. However, nowadays, the scarcity of petroleum, natural gas, iron ore and copper has become a severe problem, and the prices of important strategic resources fluctuate violently.China is a big country which is rich in resources. However, due to the excessive consumption of energy and decrease of the mineral grade. China has to rely on the imports of resources to improve the domestic provision of the oil. iron ore and other important commodities, in case the lack of support. This situation makes China more dependent on outer market, if China hopes to have rapid development. The fluctuant and supply restriction of other countries'resources are also threat to China's economic security. Faced to the uncertainty of importation of resources, powerful Chinese national enterprises target the overseas. Overseas M&A can help domestic enterprises to participate in the global resource allocation, to have access to safe, reliable and strategic resources, to fill the supporting gap of national important resource, to improve the response level of resource commodity price, which also can give enterprises a competitive edge and pricing right in bargaining process. This is of great significance in alleviating energy shortage, safeguarding national economic security and achieving sustainable economic growth.Overseas M&A has already been the common method to scramble the resource among the developed countries. As a represent of emerging economies, overseas M&A has been carried out in late 90s', In addition, China is confronted with many obstacles over the M&A, which directly led to the M&A failure. Therefore, how to identify and prevent the risk in this process is getting more and more attention in recent years. Based on the analysis of the status of overseas M&A of resource-based enterprises, this paper tries to provide a new way to identify and measure risk and analyses the real M&A example between China and Zambia using the fuzzy AHP method. hoping to help China's resource-based enterprises in preventing these risks.This paper major includes four parts:The first part includes Chapter 1 and Chapter 2. It presents the purpose of this paper. The purpose is that based on the international research and identification of key concepts, with reference to relevant theories of overseas M&A and risk control. this paper helps in the theory foundation of risk identification, measurement and prevention of China's resource-based enterprises' overseas M&A. Meanwhile, this part introduces the recent situation of China's resource-based enterprises' overseas M&A and analyses the features and motivation of resource-based enterprises' overseas M&A on the base of analysis of macro situation and data.The second part is Chapter 3. This part mainly introduces the theory contents of risk identification and measurement. Based on analysis the theory of many examples, this part uses the HHM method to list the risks impacting China's resource-based enterprises'overseas M&A. and introduce the risk filter concept, which offers effective risk resource in using AHP method. Besides, this part introduces the using process of AHP method.The third part is Chapter 4. This part introduces the practice of HHM-FUZZY-AHP method with the realistic examples. With the identification and measurement of risk set of China's resource-based enterprises'overseas M&A. more practical conclusions can be reached.The fourth part is Chapter 5. Based on the risk identifying and measuring above, this part gives pointed prevention measures which make the whole paper effective in the practical instruction.