The Research On Identification And Control Of Financial Risk About Cross-border Mergers And Acquisitions In China’s Household Electrical Appliance Enterprises

In recent years, with the advancement of the process of economic globalization, the mergers and acquisitions of Chinese enterprises in overseas play an increasingly active role, from energy, automotive to home appliances, from market share, technology possession to brand possession, Chinese enterprises actively participate everywhere. But in the Cross-border M&A wave of globalization of Chinese enterprises, China’s household electrical appliance enterprises occupied a important position for many years.From TCL acquired Thomson, to Haier, Changhong series of cross-border M&A, the household electrical appliance enterprises lead China’s overseas M&A wave, which are the pioneer of corporate cross-border mergers and acquisitions.However, the results of cross-border M&A of household electrical appliance enterprises are not satisfactory, many mergers and acquisitions performance decline, falling profits, increased debt risk, and some get involved in a huge amount of claims risk. Looking at a large number of cases, we found that the target company valuation is inappropriate, improper financing methods, capital strand breaks,M&A integration failure brought about by the financial risk have seriously affected the success of cross-border M&A of household electrical appliance enterprises. Therefore, how to effectively controlling the financial risk of cross-border M&A have been put on the agenda of China’s household electrical appliance enterprises, which has important theoretical and practical significance on establishing financial risk prevention awareness to grasp the financial risk, thereby strengthening the international competitiveness, and promote the global layout.This article discussed the following seven chapters:Chapters Ⅰ and Ⅱ, Introduction and literature review, the specific content will not repeat them. The third chapter describes the financial risk of cross-border M&A overview of the theory, the main contents include the concept and characteristics of cross-border M&A of financial risk, financial identification theory financial risk control theory. The fourth chapter introduces current situation of the cross-border M&A of China’s household electrical appliance enterprises. The main contents include the characteristics and motivation of cross-border M&A of household electrical appliance enterprises,Chapter five carried out a detailed identification of the financial risk in M&A preparation stage, M&A implementation stage and M&A integration stage. Chapter VI combines TCL acquisition of Thomson’s case, analyses the M&A failure at all stages in depth from the perspective of financial risk, and propose solutions. Chapter VII put forward countermeasures and suggestions on how to effectively controlling the financial risk of the household electrical appliance enterprises in M&A preparation stage, M&A implementation stage and M&A integration stage.Starting from the particular perspective of the household electrical appliance enterprises, an overview of cross-border M&A financial risk theory, with identifying the financial risk of cross-border M&A of household electrical appliance enterprises in phases as the theoretical basis, and analysis TCL acquisition of Thomson’s case to the perspective of financial risk, and then a series of measures to control financial risk in response to the consolidated financial risk faced by the household electrical appliance enterprises. This article hopes to provide a reference for how to control the financial risks of China’s household electrical appliance enterprises and other enterprises in overseas M&A. Because of the theoretical level is limited, however, this article only goes theoretical research on cross-border M&A financial risk in the general sense, but lack of empirical studies, which shows the inadequacies of this article.