The Valuation Risk Of M&A Under "The Belt And Road" Initiative,and Its Guarantee System

"The belt and road " countries has become a new hot spot for cross-border mergers and acquisitions.However,,because the region is mostly developing countries,with diversified ideology and geopolitical problems,involving many international interest groups,the complicated situation has set obstacles to China’s "The belt and road" construction,and has increased the risk of M & A investment in the region.Value evaluation is the basis of M & A activities,which directly affects the success or failure of M & A and value creation.The risk is the direct cause of overestimation or distortion of value.The current research is relatively limited.This paper analyzes the risk and corresponding safeguard measures of the valuation of the state’s investment in the "one belt and one Road" state from the three levels of the country,industry and enterprise.This paper adopts Gland to make case study.The data of the authority’s data released and the qualitative analysis are used to study the valuation risk in "The belt and road" countries.This case is a one large-scale transaction initiated in "The belt and road" countries.It has great difference between European and American acquisition in terms of technology and market level,and it brings greater risk and challenge to M&A valuation,so it has research value.In the research process,according to the theory of system science,the country,industry and enterprise are regarded as a whole system and studied hierarchically.According to the CAPM extended model,the impact of risk on each valuation parameter is analyzed,and from the perspective of risk management theory,the assurance system for the identified risk is designed.Through qualitative and data analysis,this paper draws the following conclusions:(1)sovereign credit rating,macroeconomic growth and inflation in national risk will affect risk-free interest rate,which will lead to valuation deviation.Poor business environment is highly related to national risk,which will generate uncertainty risk in merger valuation.(2)The unique risks of the pharmaceutical industry,the stability of the sustainable growth ability faced by enterprises,the correlation between valuation methods and valuation objectives,and the high proportion of intangible assets in pharmaceutical enterprises may lead to valuation obstacles,and the impact of these potential risks on valuation parameters is explained.(3)For the special risk,we suggest to take the risk of M&A as the endorsement of the national credit,paying attention to the policy free trade and facilitation,getting through the financing barrier to obtain financial support,doing well the investigation before the merger,setting the gambling agreement on the related matters,and so on.The main innovation of this paper is that the risk of M & A valuation is analyzed in depth,and the guarantee system for risk is designed.