Financial Risks In China's Transnational Mergers And Acquisitions

In the context of economic globalization,local companies have taken more attentions on foreign capital.Cross-border mergers and acquisitions have become more prevalent,and China is no exception.In general,successful cross-border mergers and acquisitions will not only greatly increase the profits of enterprises,but also open up a new field in international business.However,once cross-border mergers and acquisitions fail,they will consume a large amount of capital,such as time,economic benefits,etc.,which will have a negative impact that cannot be ignored on companies' future development.Therefore,in order to prevent this phenomenon,companies need to guard against risks,especially financial risks that are closely related to economic benefits.Researches on financial in cross-border mergers and acquisitions are not unusual all over the world.However,most of these researches analyze financial risks of whole or particular industry with method of Big Data from an empirical perspective,or take qualitative analysis from a perspective of case study.It is one-sided and general to draw a conclusion only by Big Data methods and qualitative analysis.Moreover,the conclusions are not so objective.Considering problems above,based on theories such as synergistic effect,internalization,and dynamic risk control of mergers and acquisitions,the pricing risks,financing risks,payment risks,and integration risks involved in the case of Tencent's acquisition of Supercell are analyzed in this study.Analyze the distribution of financial risk in cross-border mergers and acquisitions using AHP as a method,and use this as a benchmark to evaluate Tencent's prevention and control measures.Following results can be obtained through this systematic research:1)Enterprises can pointedly analyze the facing financial risks along the order of "risk definition-a risk analysis-a risk assessment-a risk control" while analyzing financial risk of cross-border mergers and acquisitions;2)Financial risk of cross-border mergers and acquisitions can be analyzed by method of qualitative analysis.In this study,financial risks mainly consist of pricing risk,financing risk,payment risk,and integration risk.Influencing factors can be conceived in above four stages combining with the nature of cross-border mergers and acquisitions;3)After conceiving specific influencing factors,financial risk of cross-border mergers and acquisitions can be quantitatively analyzed by constructing an evaluation system.Enterprises can obtain the distribution of financial risks by using AHP method and comparison of influencing factors;4)Financial risk control of enterprises can be assessed combining qualitative analysis and quantitative analysis of influencing factors.The advantage and inadequacy can be concluded to be a reference for other enterprises.What is different from other studies is to make a systematic statement of financial risk analysis of cross-border mergers and acquisitions from the perspective of multinational mergers and acquisitions,combining qualitative analysis with quantitative analysis methods.In terms of qualitative analysis,financial risk assessment indicators of cross-border mergers and acquisitions are created from perspectives of pricing risk,financing risk,payment risk,and integration risk after finding out risks.On the other hand,in terms of quantitative analysis,AHP method is used to calculate the distribution of financial risk of cross-border mergers and acquisitions,and take this as a basis to evaluate the prevention and control measures of Tencent.