Research On Financial Risk Analysis And Prevention Of Transnational M&A Of Chinese Enterprises

With the support of “going out” strategy and the increasing of Chinese enterprises' economic power,Chinese enterprises participate in overseas M&A activities.For example,Lenovo mergered IBM PC,Shuanghui acquired Smithfield.Besides,some Western countries are still deep subprime mortgage crisis and the European debt crisis,which provides M&A opportunities to China enterprises.According to statistics,only the first half of year 2016,China's cross-border M&A transactions are more than 143 billion dollars,China's overseas M&A market is extremely hot.The volume and transaction volume of overseas M&A activities in China keep increasing.However,at the same time,the problems of overseas M&A are also emerging.The problem of risk prevention is especially prominent.And because of this series of problems,China's cross-border M&A transaction failure rate is much high.Therefore,in order to promote the healthy development of China's cross-border M&A market and improve the success rate of mergers and acquisitions,preventing and responsing cross-border M&A risk is becoming increasingly important.There are many risks in the M&A activities,such as political risk,legal risk,financial risk and other risks.,and enterprises pay most attention to the fianncial risk.However,at present,Chinese enterprises' prevention awareness is relatively weak,risk-taking measures are relatively simple.Therefore,in order to making our enterprises better hedge financial risks,we need to discuss China's cross-border M&A financial risk prevention problems.The paper firstly analyzes the present situation of M&A in China and the problems of Chinese enterprises in M&A financial risk prevention.And then,with Midea M&A Kuka as a case study,this paper points out the main financial risks in the preparation stage,implementation stage and integration phase.Based on the analysis of Midea's corresponding to prevent financial risk measures,this paper lists out some experience which are worthy for learning.Finally,on the basis of the above analysis and research,combined with experience of of Chinese enterprises in recent years,this paper proposes some measures,such as making full use of the role of intermediary organizations,paying attention to developing M&A strategy,setting up proper identity of M&A subjects,purchasing financial and insurance products,exploring "funds and investment Banks" as financing methods and etc.to reduce financial risks.Hope that through the study of this paper,Chinese enterprises can reduce the financial risks in cross-border M&A and better benefit from M&A transactions.