Financial Risk Analysis And Prevention Of Overseas Acquisitions Of Chinese Enterprises

With the rapid development of the global economy, in order to seek better development space and international resources, chinese enterprises began to overseas mergers and acquisitions. Overseas M&A is an important way for enterprises to accumulate capital, access to resources and increased global competitiveness. Due to the financial crisis, many foreign company’s asset prices fall,in order to tide over the difficulties, they choose to seek foreign investors, which provides a rare opportunity for Chinese enterprises carry out overseas mergers and acquisitions. However, Chinese enterprises have encountered great resistance in the implementation of overseas mergers and acquisitions, for example, information asymmetry risk, financial risk, and the risk of post-merger integration, etc. Statistics show that the failure rate of overseas acquisitions businesses in excess of50%, Does not control the financial risk is an important factor.This paper attempts to analyze the financial risk of Chinese enterprises overseas mergers and acquisitions, propose appropriate risk prevention measures, thus providing theoretical and practical guidance for the implementation of China’s enterprises overseas mergers and acquisitions. This paper first reviews the scholars’s researches of financial risks of overseas mergers and acquisitions,defines the concept of overseas acquisitions and financial risks of overseas mergers and acquisitions,provides a theoretical basis for pricing risk, financing risk, payment risk and post-merger financial integration risk of enterprises overseas mergers and acquisitions. To further test the overseas mergers and acquisitions financial risk,this paper further discuss pricing risk, financing risk, payment risk and post-merger financial integration risk of Chinese enterprises overseas mergers and acquisitions,and proposed analysis method for Chinese enterprises to solve financial risk.This paper analyzes thebefore and after financial risk of Geely acquisition of Volvo Group, analysis the changes of the financial indicators. Finally,propose preventive measures for the financial risk of Chinese enterprises overseas mergers and acquisitions.