Study On The Financial Risk Of Overseas Mergers And Acquisitions Of Energy Enterprises

As China 's economy continues to grow at a rapid rate,domestic energy demand has started to rise sharply.Chinese energy companies are increasingly implementing "going out"strategies through overseas mergers and acquisitions to increase their global influence.Although the number of overseas mergers and acquisitions and turnover of Chinese energy companies are increasing year by year,only about 30%of Chinese energy companies in overseas mergers and acquisitions can maintain the same or profit after the merger.Financial risks often run through the entire process of cross-border mergers and acquisitions and affect the success of mergers and acquisitions.How to ensure the smooth progress of cross-border M&A activities and obtain the maximum benefits with the minimum financial risk has become a key concern of the business and academia.There are many types of financial risks.How to identify financial risks and how to avoid or manage financial risks has become an important issue for companies to consider in participating in cross-border mergers and acquisitions.Therefore,this paper takes China Southern Power Grid's acquisition of Chilean power grid company Transelec SA as an example to conduct financial risk research,analyzes the financial risks existing at the current stage,and relevant suggestions to resolve the risks.The main body of this article is composed of six parts.The first part is an introduction,which introduces the current form of M&A in China,reviews domestic and foreign literature,explores the research content,research methods,and research value of domestic and foreign M&A financial risks.The second part analyzes the definition and classification of transnational financial risks,summarizes the literature,finds the blank points of research,and then starts to analyze the financial risk control of transnational mergers and acquisitions of energy companies.The third part introduces the current situation of China's energy companies 'cross-border mergers and acquisitions and the analysis of financial risks.It has a preliminary understanding of the current situation of China's energy companies' cross-border mergers and acquisitions and the financial risks.The fourth part analyzes deeply the case of China Southern Power Grid's merger and acquisition of Chilean grid company Transelec SA,analyzes the risks existing in China Southern Power Grid's debt repayment ability,profitability,operation ability and development ability,and summarizes them.The fifth part expands to China's energy companies based on the analysis in the fourth part,and puts forward practical risk prevention measures so that Chinese energy companies can effectively control various risks hidden in overseas mergers and acquisitions and achieve successful mergers and acquisitions.The sixth part is the conclusion part.The main contribution of this article is to analyze the relative reasons with the success or failure of the case,especially the important way to avoid risks and minimize the risks,so that the company formulates a scientific and clear financial strategy for cross-border mergers and acquisitions,and formulates important measures to deal with financial risks,so that the company To a certain extent,avoid financial problems after cross-border mergers and acquisitions,and provide corresponding guidance for improving financial performance.