Research On Financing Mode Of Kerr In Transnational Merger And Acquisition Of Xiwang Foodstuffs Co.,Ltd

With the further implementation of China's “ going out” strategy,more and more enterprises have begun to move to overseas markets through cross-border mergers and the number of cross-border mergers and acquisitions in China reached the climax in 2016.The results of many companies' cross-border mergers and acquisitions ended in failure.The reason is that no reasonable financing methods have been adopted.Therefore,how to choose the right financing method to match each other,get rid of the single financing method,high financing cost,unreasonable capital term matching,and high financing risk is a problem that every multinational M&A enterprise must consider.Xiwang Foodstuffs Co.,Ltd.(hereinafter referred to as Xiwang foods),as the only private listed enterprise of the china-canada project signed in 2016,successfully completed a "snake-and-elephant"-style acquisition of Kerr to open up the healthy food market.The article conducts an in-depth analysis of the case and summarizes the experience from the perspective of the enterprise.On the one hand,it can provide some experience for other companies to get out of the financing dilemma when they cross-border M&A,which has practical significance.On the other hand,it can provide certain theoretical support for enterprises to choose financing methods of cross-border mergers and acquisitions in the future.Firstly,the article reads and summarizes the domestic and foreign literatures,defines the meaning of cross-border M&A financing,sorts out the financing theory,and introduces the main financing methods.Afterwards,the specific content of the case is introduced,mainly on the background of M&A,the main situation of M&A and the M&A process.Then,the paper introduces the financing methods adopted in the M&A process,and analyzes its influencing factors and characteristics.It finds that the maturity of m&a financing policy,capital market in China,the enterprise's own profitability,capital structure,the acquisition time affect the choice of the financing way,the financing method chosen by Xiwang Food has the characteristics of high leverage,"Borrow long return short" funding period matching method,and using the Earn-out financing payment mechanism.Then it analyzes the effect of financing methods,showing that the financing methods of "own funds + private equity + entrusted loan + bridge loan + syndicated loan + non-public offering of shares" greatly reduce the cost of capital,share the risk of merger and acquisition,and reduce the constraint of capital leaving the country,and a simple reminder of the risks.Finally,based on the above analysis,we can draw conclusions and enlightenment.Enterprises should actively seek strategic alliances when conducting cross-border M&A financing,fully integrate domestic and overseas financing platforms and use financial innovation,alleviate the pressure of the financing,increase the success rate of m&a financing,but should also constantly,establish and perfect the system of financing of mergers and acquisitions in China related to create a good financing environment for the enterprise.