The Enlightenment Of COFCO Overseas Agricultural Mergers And Acquisitions To Chinese Agricultural Enterprises "Going Globally"

The increasing rapid development of economic construction since the reform and open up has transformed our country from a backward agricultural country into a rapidly emerging industrial nation,making per capita GNP(gross national product)entering the ranks of upper and middle income countries.A notable change with the improvement of economic strength and living standards is the China's shift from absorbing foreign capital-bringing-in strategy in the past to investing overseas-the "going globally" strategy.Recently,in order to ensure the national food security and satisfy people's purpose to improve their food consumption taste,China's foreign direct investment in the aspect of the agriculture has been increasing rapidly and witnessing a bright future.Agriculture occupies a crucial place in our country.Under the situation of globalization,agricultural enterprises going globally will promote the development of our economy,one of the most obvious ways is to make the foreign direct investment.Our country has been a big-power agricultural country all the time.Promoting agricultural "go globally" strategy is conducive to improve the agricultural productivity of our country,at the same time,it can optimize the internal system of agricultural industry and realize the common development between agricultural quality and quantity.Simultaneously,the "go globally" strategy in agriculture can realize the optimal allocation of resources,form a virtuous circle of domestic and foreign resources,realize the equilibrium of supply and demand of domestic agricultural products,and alleviate the price pressure of some scarce products through making use of the international market.Although in general,the operation of Chinese agricultural enterprises is developing,some enterprises are still in a state of stagnation and suspending because of the strange business environment of the host country and the political and economic risks,cultural differences and lack of cross-culture communicative capabilities.In addition,the particularity of agricultural enterprises,that is,the natural attributes of agricultural products and the periodicity of production,makes them face more management risks brought by the high cost of product market circulation and the high risk of transaction,and finally increase the financial risks of enterprises.In order to solve the problem,this paper selects a successful case to analyze which is necessary for Chinese agricultural enterprises to go globally.The structure of this paper is as follows:The first chapter is the introduction,which illustrates the research background,purpose and significance of this paper,introduces the research methods adopted,and the main framework of this paper.The second chapter summarizes the recent situation of Chinese agricultural enterprises"going globally",and gives a comprehensive review of the domestic and foreign research literature,thus widening the writing thought for this paper.The third chapter analyzes the influence of agricultural enterprises "going globally" in China.Agriculture "going globally refers to the direct investment activities of all kinds of enterprises or companies in different countries or regions of the world in different aspects of agricultural field in various ways in China.Chinese agricultural enterprises "going globally" means the direct investment to different aspects of agricultural in different countries or regions around the world by Chinese various enterprises.Agricultural enterprises "going globally" is an essential means to make full use of the two foreign and domestic currency farms and two kinds of resources,which is necessary to develop modern agriculture,accelerate the space of agricultural development and guarantee the supply of main agricultural products under the integration of global economy.First of all,it introduces the development of agricultural enterprises at home and abroad.At present,the present situation of agricultural enterprises in our country is mainly as follows:the speed of scale expansion is quickened,the investment fields and regions are more extensive,and the operation modes of enterprises are diversified.But China's agricultural trade has entered an era of deficit.Secondly,SWOT analysis is used to analyze the advantages,disadvantages,opportunities and threats of Chinese agricultural enterprises.The advantages include:1.international and domestic environment has created the condition for our country agriculture foreign direct investment;2.China's comparative advantage in agricultural technology increases the advantages for our enterprises "going globally";3.China has a rich variety of agricultural products.The disadvantages include:1.Changes in the political and economic environment have led more and more countries to participate in transnational mergers and acquisitions,leading to more intense competition;2.Chinese labor cost rigidity increases,the original low-cost labor force superiority no longer exists;3.The dependence of crops on the natural environment makes it more difficult for transnational agricultural acquisitions.The opportunities include:1.With the implementation of the policy-opening up,opportunities for economic development have increased,and the government has also issued many corresponding policy support to provide opportunities for transnational mergers and acquisitions of agricultural enterprises in China.China's foreign exchange reserves have been rising in the past few years,and the trend of economic development provides an opportunity for China's foreign direct investment.And the threats include:1.Agricultural international market tends to saturate.2.The way of agricultural product subsidy appears bottleneck.The fourth chapter takes the case-COFCO's(China Oil&Foodstuffs Cooperation)agriculture merger and acquisition on Nidera as an example to carry on the empirical analysis.From the background of COFCO and the Nidera Group,this paper analyzes its merger and acquisition process,and uses the PEST analysis method to analyze the politics,economy,society and technology crisis and the relevant solutions behind this event.The political risks include:1.The important position of agriculture in national economy brings its inner financial risk.2.The large scale of this merger and acquisition leads to the integration risk.The economic risk includes:In order to effectively control the financing risk,the COFCO has adopted a relatively new mode of acquisition to mitigate the financing risk by means of joint investment.The social risk include:transnational mergers and acquisitions will encounter different values of foreign countries.Different business management models and managers' thinking modes are different under different environments,which leads to the overall behavior model of the enterprise and the code of conduct different.The technical risks include:1.Import and export inspection and quarantine standards vary from country to country.2.There are differences in import policy and trade practices in different countries or regions.3.The transportation and storage of agricultural products require specific containers and equipment,and we need to relieve the pressure through technology.In the fifth chapter,in order to optimize the countermeasures of China's agricultural enterprises "going globally".Through the analysis of the above mentioned COFCO event,from the overall to the specific,put forward countermeasures for our enterprises "going globally" from the following three aspects:government,industry associations and agricultural enterprises.Firstly,at the government level,we ought to build stable and harmonious diplomatic relations,draw up detailed development plans,establish a financial services system,set up special funds for agricultural enterprises "going globally",and improve insurance and vetting systems.Secondly,at the level of industry associations,we can set up information network for agriculture enterprises "going globally",promote the association of industry chain,cultivate the international grain merchants with the whole industry chain layout,hold regular exchange meetings,and promote the dissemination of information and technology.At the level of agricultural enterprises,we should have an in-depth understanding of the agricultural characteristics of the host country,adapt measures to local conditions,benefit from each other,promote the development of agriculture in bilateral countries,respect the customs of the host country,carry out public welfare undertakings,and enhance the innovative ability of enterprises to create our own brand effect of agricultural products.The sixth chapter is a summary of the full text.The conclusion is drawn and the innovation and deficiency of this paper are also put forward.The innovation of this paper is to analyze the risks in the process of transnational mergers and acquisitions based on the characteristics of agricultural enterprises,and select the case of COFCO.Based on the case analysis,evaluation and discussion,this study has reference value for the risk management of agricultural enterprises' internationalization development,and also has a strong reference significance for other enterprises' risk management in the period of the surge of transnational mergers and acquisitions of Chinese enterprises.But,this paper also has some limit.Due to the problem of the availability of agricultural data,it is difficult to carry out quantitative analysis in this paper.Besides,with reference to the limited theoretical level of the author,there is a gap between the theoretical understanding and the actual situation,the difficulty in collecting information,and the particularity of the transnational mergers and acquisitions.In this paper,the potential risk discussed during the process of COFCO merger and acquisition case may not be comprehensive enough,and the suggestions and conclusions based on only one single case are limited.