Financial Risk Management For Chinese Enterprises In Cross-Border M&A

With the increasingly fierce competition in the global environment,cross-border mergers and acquisitions as one of the means to achieve rapid development of enterprises,access to technology and knowledge resources,is increasingly favored by Chinese companies.Since China promoted the "go global" strategy,companies have developed cross-border mergers and acquisitions strategies.According to statistics of JP Morgan Chase,in 2016,the turnover of Chinese companies' overseas mergers and acquisitions reached as high as 229 billion U.S.dollars,and the number of transactions reached a record high.Cross-border mergers and acquisitions by Chinese companies have become the mainstream force for international corporate mergers and acquisitions.However,due to the relatively short time for cross-border mergers and acquisitions in China and the lack of relevant theoretical guidance,Chinese companies lack sufficient experience in cross-border mergers and acquisitions.It is easy for Chinese companies to overlook various potential financial risks during cross-border mergers and acquisitions,and they have not taken corresponding measures in time,which eventually led to the failure of mergers and acquisitions.Therefore,it is very important to thoroughly study China's financial risks and related issues in the process of cross-border mergers and acquisitions,which is of great significance for helping Chinese companies to make crossborder mergers and acquisitions and achieve success.This article is divided into six parts.Firstly,the background and significance of the research are introduced.Although China has already dominated the M&A market in the world,due to the lack of mature theoretical systems and practical experience,the success rate is still low.It is hoped that this analysis and research can effectively improve the domestic Corporate Finance Risk Cognition and Prevention Awareness in the Process of Transnational Mergers and acquisitions.Secondly,it briefly explains related concepts and theoretical foundations for cross-border mergers and acquisitions of enterprises,and briefly points out various potential risks in the process of cross-border mergers and acquisitions,and effectively manages and prevents financial risks,such as the use of dynamic risk control.Theoretical and M&A synergy theory and other related theories guide financial risk management.There is also an in-depth analysis and discussion of the causes of various financial risks in the process of cross-border mergers and acquisitions by Chinese companies.The financial risks of multinationals in the process of mergers and acquisitions mainly include valuation risks in the preparation phase and financing risks in the process of mergers and acquisitions.As well as the payment risk,there is also the financial integration risk in the integration phase after the merger and acquisition.On the basis of a detailed study of the causes of risks,a detailed analysis of the financial risk prevention methods in the process of mergers and acquisitions of Wanda Group's mergers and acquisitions of AMC's specific cases,and a summary of the financial risks of Wanda Group in the merger and acquisition of AMC companies,Based on this,the Wanda Group's merger and acquisition case provides recommendations for the Chinese company's financial risk prevention during cross-border mergers and acquisitions,and proposes specific financial risk response measures through valuation methods,financing channels,and payment aspects,and finally Wanda.The Group's financial risk prevention methods are summarized and concrete suggestions are made for the prevention of financial risks when Chinese companies engage in cross-border mergers and acquisitions.