Research On Risk Evaluation Of Domestic Enterprise Facing Acquisitions Of Foreign Pe Funds Based On By-funded Enterprises Perspective

In recent years, with the acceleration of the process of economic globalization and China’s rapid economic development, acquisitions of foreign PE funds in China are becoming more frequent. Foreign PE funds purchasing domestic enterprises, which makes domestic enterprises obtain the financial support and enhance the company’s value, and makes the foreign PE funds gain rich rewards from the investment. China’s WTO commitments not only make the combination of them become possible, but also make it develop as an inevitable trend. Foreign PE funds play an important role in promoting domestic enterprises’developing. It can greatly enhance the value of companies through the innovation of enterprise management and financial structure. At the same time, it also brings some negative effects, such as business assets being undervalued, their own brand disappearing and the ultimate control of their company losing. If by-funded enterprises can not deal with these risk factors properly, they are likely to suffer immeasurable loss. Therefore, when facing of the acquisitions of foreign PE funds, it is necessary for by-funded enterprises to take certain measures to evaluate and prevent the risks.Based on the above background, this article studies the risks of by-funded enterprises from the angle of by-funded enterprises, using gray fuzzy comprehensive evaluation method and game theory. And risk evaluation mechanism and risk prevention mechanism are constructed. The main content includes:firstly, risk management theories of by-funded enterprises are described, such as PE theory, purchase theory, risk theory, game theory and so on. Secondly, the origins of foreign PE funds and domestic enterprises are analyzed, and then relevant legal systems of foreign PE funds’acquisitions are summarized. Thirdly, the risk evaluation index system of by-funded enterprises is established, combining with previous research results of scholars, as well as acquisition practice of foreign PE funds in our country. On the basis the gray fuzzy comprehensive evaluation model is established using the gray system theory and fuzzy comprehensive evaluation method. Two basic conclusions are reached through model validation. Firstly, the risk level of by-funded enterprises is close to high-risk, when they are facing the acquisitions of foreign PE funds. Secondly, the risk of selecting the acquirer, the risk of losing corporate assets and managing operational risk are the key risk indicators which affect the total risk level of by-funded enterprises. Finally, three main risk factors obtained from model validation are analyzed using game theory, which provide constructive suggestions for by-funded enterprises in risk prevention.