Research On The Identification And Control Of Financial Risks From Cross-border Merger And Acquisition For Chinese Companies

Under the background of economic globalization,when Chinese companies want to further expand the supply of resources,open the market of other nations,and enhance core competitiveness,cross-border merger and acquisition has become an effective means.Because target companies have rich resources and a mature operation system in host nations,they can obtain a lot of convenience compared with new enterprises in foreign nations.With the increase in national strength of China and the progress of the “Belt and Road” strategy,more and more Chinese companies wish to enter the international market in the form of cross-border merger and acquisition.As a result,the number and amount of cross-border merger and acquisition in China have surged to new highs time and time again.However,under the background of market economy,income and risks always go hand in hand.While bringing huge revenue to a company,cross-border merger and acquisition can also generate a lot of risks for it.Among them,financial risk seems particularly prominent,which runs through the whole process of merger and acquisition from the beginning to the end and plays a decisive role in the success and failure of cross-border merger and acquisition.Therefore,studies on financial risks from cross-border merger and acquisition have also constantly emerged.However,since studies on cross-border merger and acquisition in China start late,studies on financial risks from cross-border merger and acquisition mainly concentrate in theoretical risk analysis and there are few papers on financial risk identification and quantitative analysis of evaluation.This thesis integrates qualitative and quantitative analysis methods to test and evaluate financial risks from cross-border merger and acquisition to propose targeted prevention and control measures.The thesis firstly adopts the literature research method,and sorts out relevant domestic and overseas literature on financial risks from cross-border merger and acquisition for companies to determine the research perspectives of the thesis.Then the thesis sorts out and summarizes the research on the definition,type and agent of merger and acquisition,and illustrates the types and manifestations of financial risks from merger and acquisition for Chinese companies by taking into account the characteristics of Chinese companies.Secondly,the thesis adopts the case research method to review the typical case of cross-border merger and acquisition of M Company by L Group,analyzes the agent for this cross-border merger and acquisition by L Group,and identifies the financial risks for this cross-border merger and acquisition.Based on this,the thesis constructs the cross-border financial risk evaluation indicator system of L Group,adopts the fuzzy comprehensive evaluation method to conduct a quantitative evaluation of the financial risks from the merger and acquisition by L Group,and draws the conclusion that pricing risks,foreign exchange risks and integrated risks are at a relatively high level of risks,financing risks and debt repayment risks are at a medium level of risks,and the overall financial risks are at a relatively high level of risks.Finally,based on the results of identifying and evaluating the financial risks from cross-border merger and acquisition by L Group,the thesis proposes targeted suggestions on preventing and controlling financial risks from Chinese companies' cross-border merger and acquisition to provide references for Chinese companies to be more capable of evading financial risks in cross-border merger and acquisition in the future.