Research On The Financing Methods And Risks Of Private Enterprises' Cross-border M&A

In the context of the Belt and Road Initiative,Chinese companies have set off a wave of foreign investment,and many companies have begun to acquire their favorite targets overseas.China also has no doubt become the world's second largest foreign investor.In the wave of cross-border mergers and acquisitions,private enterprises have surpassed state-owned enterprises in terms of total transaction value and number of cross-border mergers and acquisitions,and have become the backbone of cross-border mergers and acquisitions.However,it must be mentioned that private enterprises that originally faced difficulties in financing and expensive financing in the capital market.After the country implemented new foreign exchange regulations and new overseas investment regulations at the end of 2016,private enterprises raised funds in the market and exited smoothly.The difficulty of the transaction has increased again,so that the number of cross-border mergers and acquisitions and the value of cross-border mergers and acquisitions in 2017 ended a high growth trend for several consecutive years.After 2017,with the state's rectification of the capital market and foreign exchange control,the difficulty of cross-border financing of private enterprises has not abated,and the risk of cross-border M & A financing is high.In order to smooth the cross-border transactions of enterprises,the issue of financing risks needs to be resolved.In this context,this article selects the case of West King Foods' acquisition of Canadian Kerr,which has successfully achieved cross-border mergers and acquisitions in controlling financing risks,and studies the behavior of corporate mergers and acquisitions based on risk management theory.The first step is to analyze the financing risks of the company before the merger and acquisition transaction,the second step is to analyze the behavior of Xiwang Food to respond to this risk,the third step is to conduct a risk analysis to the behavior in the second step,and finally to analyze the Xiwang Food Response based on the risks identified in step 3.Through research,this article finds that,first,corporate cross-border M & A financing is a long-term process.From pricing to the end of the later period of equity settlement and subsequent operations,there are risks.Enterprises should do risk management of the entire process.Secondly,companies often cannot achieve a smooth and low-risk completion of M & A transactions through a single M & Afinancing method.Choosing an appropriate combination financing method can help companies reduce cross-border M & A financing risks.Third,because cross-border mergers and acquisitions often involve the entry,exit,and exchange of funds,the impact of state regulation on mergers and acquisitions should be fully considered.