Research On Overseas M&A Risks And Prevention Of Listed Environmental Protection Companies

As one of the key areas of the country’s strategic emerging industries,the environmental protection industry has naturally been sought after by capital in recent years,showing a strong development momentum.In order to quickly enhance their competitiveness,Chinese environmental protection companies have gone abroad to acquire high-quality assets overseas.From 2015 to 2017,the number of overseas acquisitions by Chinese environmental protection enterprises has not only increased the number rapidly,but the scale of asset transactions has also increased rapidly.Listed environmental protection companies are absolute Main force of the overseas acquisitions.But looking back at the cases of mergers and acquisitions of these environmentally companies,I found that the results of mergers and acquisitions of many companies are not satisfactory,and some companies have even sank into risks and crises.On the other hand,due to the late start of overseas mergers and acquisitions of environmental protection enterprises in China,there is currently little theoretical research on overseas mergers and acquisitions of environmental protection enterprises in China,and the lack of theoretical support for overseas mergers.Therefore,it has practical significance to study the overseas merger and acquisition risks of listed environmental protection enterprises in China.This article starts with the motivations,characteristics and risks of overseas mergers and acquisitions of listed environmental protection companies in China.It summarizes that listed environmental protection companies have certain risks in common,Such as operation and management risk,macro policy risk,valuation risk,financial risk,etc.The author consults a lot of literature on the risks of overseas mergers and acquisitions.Scholars at home and abroad have a relatively complete theoretical system including before,during,and after overseas mergers and acquisitions.However,this does not perfectly explain the current development characteristics of environmental protection enterprises and the Risk situation encountered by environmental protection industry in China.Therefore,this article selects the listed company Tianxiang Environment from overseas M & A stars to asset reorganization as a representative risk case.First,the reasons for Tianxiang Environment’s overseas mergers and acquisitions are multifaceted.Three large-scale mergers and acquisitions were carried out in the three years from 2015 to 2017,from business transformation,advanced technology and global market share to leapfrog development and even an international environmental protection giant.The strategy is much aggressive.Then,this article focuses on analyzing the core risks before and after the merger from the perspective of its merger methods and merger risks,as well as the reasons for merger failure and crisis.Tianxiang Environment uses the M &A industry fund model for overseas mergers and acquisitions.The fund model improves efficiency and leverages resources.At the same time,due to the large size of the target company,Tianxiang Environment has expanded its financial leverage to the limit.In its M & A process,there are mainly high leverage risks,incapable of valuationrisks,goodwill impairment risks,frequent M & A risks,Financing risk,and inadequate response to changes in the external environmentrisks;after its M & A is completed,there are mainly loose financial integration risks,lack of talent training risks,lack of management experience risks.Finally,this article proposes risk prevention suggestions for environmental protection companies in the development and expansion of mergers and acquisitions.The acquirershould strengthen internal risk prevention,makebusiness strategies matching its development,and pay attention to changes in the external environment and prepare for them.When merging,it is necessary to improve valuation capabilities,optimize financing capital structure,balance M & A efficiency and payment risks,and adopt a continuous M & A method very carefully.After the M & A is completed,the acquirershould strengthen financial management and control of target companies,adjust resource allocation in time,and focus on training key Talent.Ultimately mergers and acquisitionsissuccessful.With the development of China’s ecological civilization,overseas mergers and acquisitions of high-quality assets will still be an important driving force for the development of China’s environmental protection industry.Enterprises should strengthen their understanding of the causes of overseas mergers and acquisitions risks and their impact on enterprises.The issue of risk in mergers and acquisitions gives some inspiration.