Research On The Selection Of Payments Methods For Cross-Border Mergers And Acquisitions Of Chinese Enterprises

Since the reform and opening up,China’s economy has achieved a real sense of takeoff,in the market economy system,some enterprises have achieved substantial development.However,domestic companies,especially the manufacturing industry,are increasingly saturated,and the Chinese market is no longer sufficient.Transnational M&A has become an effective means for enterprises to expand international market,introduce advanced technology or realize diversified development.Most of the research on cross-border M&A in China focuses on the evaluation of M&A performance.Few studies on the M&A process,especially the payment method of M&A,are available.However,the cross-border M&A transactions of Chinese enterprises mostly adopt the cash payment method,which lags behind developed western countries in terms of the innovation and diversity of payment methods.Therefore,it has certain theoretical value and practical significance to study the choice of payment method for Chinese enterprises’ cross-border M&A.This paper chooses the case of Lenovo’s purchase of IBM global PC business,from mergers and acquisitions,equity structure changes,the purpose of financial risk,Lenovo group choose acquisition cost and the influence factors of M&A payment are analyzed,and select the cash payment and stock payment Lenovo group on the basis of the analysis,the choice of Chinese enterprises transnational M&A payment to provide the reference.Finally,the conclusion drawn from the case provides some enlightenment to consummate the payment method of M&A of China’s listed companies.Through the research in this paper,it can be concluded that :(1)stock payment is a payment method rarely used by Chinese enterprises,but this method can reduce the lack of cash flow of enterprises on the premise of guaranteeing the control right,and is conducive to the integration after merger.(2)there is no doubt about the importance of investment Banks: international investment Banks are experienced and good at dealing with cross-border M&A issues according to different industry backgrounds.It can not only provide enterprises with one-stop services such as negotiation,financing and payment,but also provide enterprises with professional technical support.(3)the introduction of strategic investors is very necessary for the post-merger integration.(4)the integration of enterprises after merger and acquisition needs sufficient capital reserves.Therefore,for the payment problem of cross-border M&A,it should :(1)strengthen the application of stock payment method in cross-border M&A by promoting debt financing.(2)Chinese investment Banks have a low degree of internationalization and have limited role in cross-border M&A.Therefore,it is necessary to improve the strength of China’s investment Banks.(3)expand the sources of M&A funds,develop M&A funds,promote reasonable and efficient payment methods,and reduce the negative impact on enterprise performance after M&A.