Research On Financial Risk And Prevention Of Chinese Enterprises In Overseas Mergers And Acquisitions

With Chinese “ Going out ” policy, Chinese companies have in recent years made inro ads into overseas market via mergers. The number of Chinese companies coming onboard has been growing despite the fact that they started relatively late compared to their foreign counte rparts. In order to seek fast expansion, many have designed plans to carry out mergers oversea s. There are increasing numbers of such cases, but risks abound even though mergers could br ing high returns.Against such a backdrop, the thesis sets out to analyze financial risks involved in overseas mergers. It focuses on motivations of companies, characteristics and financial risks of overseas mergers. Then, financial index of 25 companies, which carried out overseas mergers between 2004-2011 have been selected to go through Z value of statistical data analysis. SPSS22.0 is used to inspect one-way ANOVA test and LSD multiple mean test. It analysis yields the alteration of Z value of statistical data due to the change of financial index 4 years before/ after the mergers, against which the financial risks of companies will be analyzed. In the end, based on the empirical and basic studies of financial risks involved in foreign mergers, preventive measures are put forward depending on different stages in foreign mergers. The stages refer to risks pertaining to the time before, during, and after the merger.Financial activity is deeply intertwined with companies’ overseas mergers and acquisitions and an important metric determining the success of overseas mergers is financial risks. Chinese companies need not only to heed the existence of such risks, moreover, they need to hedge against them effectively.