Research On Chinese Enterprises Cross-border Mergers And Acquisitions Risk Prevention

China’s successful accession to the WTO provides Chinese enterprises with endless possibilities to the world market. Especially in recent years, the degree of economic globalization continues to deepen, "going out" pace continues to accelerate,along with the proposal of "along the way" strategy and establishment of the Asian infrastructure investment bank, Chinese enterprises has been offered a huge development space to cross-border merger and extremely convenient conditions.However, we also clearly see, with the signing of TPP, TTIP and a series of regional trade agreements, regional trade organizations has exerted great impact on traditional investment environment. As opportunities and challenges coexist in the current environment, cross-border mergers and acquisitions of Chinese enterprises will walk into a new era.With the continuous expansion of China’s enterprises’ cross-border mergers and acquisitions, whether cross-border M & A activity could eventually achieve the purpose of the enterprise depends on whether the enterprise has the ability to encounter the risks under the new situation in cross-border M & A and to develop appropriate preventive measures. Therefore, with the top 500 Chinese enterprises involved in cross-border mergers and acquisitions as research objects, the study focuses on cross-border M & A cases involving large amounts and wide range from2008 to 2014, and selects 79 among top 500 Chinese enterprises cross-border M & A as representative of the typical case analysis, and also collect and summarize a variety of risks appeared in acquisition process. This paper argues that the main risks that Chinese enterprises faced with in multinational merger are integration risk, political risk, financial risk, target business pricing risk and legal risks. Besides, the integration of risk has become the primary risk for Chinese enterprises’ transnational amalgamation.Since the risk of cross-border mergers and acquisitions in Chinese enterprises has the characteristics of diversification and combination, this paper starts from thetheory of cross-border mergers and acquisitions and its risk, analyzing the causes of the risk of Chinese enterprises’ transnational mergers and acquisitions, the results of the analysis shows that cross-border mergers and acquisitions in Chinese enterprises mainly exist in the system is not perfect, the lack of a comprehensive strategic investment plans and business plans, due diligence is not sufficient and can not effectively integrate the acquired business, not good at dealing with the media and a lack of personnel familiar with cross-border mergers and acquisitions and other issues.For the risk of cross-border mergers and acquisitions in Chinese companies, the paper puts forward the measures to prevent the risk of cross-border mergers and acquisitions in Chinese enterprises : in the aspect of political risk, we should establish an early warning system of political risk and actively carry out government business diplomacy; in the aspect of legal risk, it is necessary to study the detailed legal policy of cross-border mergers and acquisitions and improve relevant laws and regulations;in the aspect of pricing risk target enterprise, we should improve information asymmetry, establish and improve the enterprise evaluation system and pay attention to the role of intermediaries; in the aspect of financing risks, we should choose a reasonable way of financing and to take measures to control interest rate risk and exchange rate risk; in the aspect of integrated risk, we put forward preventive measures about integration of cultural integration, integration of human resources integration and integration of business integration.