The Case Study On Risk Management Of Midea’s Cross-border Acquisition Of KUKA

With the free development of economy and trade around the world,the weakening of barriers has led to the integration of multinational regions.In this moderately relaxed investment environment,mergers and acquisitions can transcend national borders.It is a quicker and more direct way to become a company to gain market share and upgrade technology or resources.In recent years,Chinese companies’ cross-border mergers and acquisitions have begun to take a cautious attitude.It can be found from the past that cross-border mergers and acquisitions are not only risky for Chinese companies,even for well-known overseas companies that are proficient in this way.Midea Group’s acquisition of KUKA Robotics with its headquarter located in Germany is in line with the current trend of Chinese companies’ overseas mergers and acquisitions,and the target company is gradually shifting from "garbage picking" to a company with core competitiveness.In addition,Midea Group also paid a huge amount of consideration in this large-scale M&A transaction,and correspondingly confirmed the goodwill of more than 30% of Midea Group’s net assets.This is also very consistent with the issue of high goodwill confirmation that Chinese listed companies generally need to face after conducting mergers and acquisitions transactions.It is very representative in the current transnational mergers and acquisitions of many listed companies in my country.This article first conducts a comprehensive analysis of Chinese companies’ global cross-border mergers and acquisitions in 2019,analyzes the background and significance of case selection,and introduces the basic theories of cross-border mergers and acquisitions risk management.Afterwards,the risks in the M&A transaction were identified and their causes analyzed using due diligence and brainstorming.The three stages of cross-border M&A transactions were used as the perspective to evaluate the risks and their highlighted stages.The risk prevention measures are evaluated,and finally provide enlightenment for the management and resolution of the risks faced by Chinese companies in cross-border mergers and acquisitions.For example,Chinese listed companies should seek the help of professionals or intermediaries and formulate reasonable financing plans.Finally draw a conclusion.This article analyzes Midea Group’s selection and formulation of risk management strategies in this merger and acquisition activity,which can help managers and financial personnel of listed companies avoid blindness and extremeness when faced with strategy formulation and planning in cross-border mergers and acquisitions,and get away from cross-border M&A transactions.From the perspective of mergers and acquisitions,this awareness of risk management is also a good supplement and improvement to the financial management objectives and institutional systems of listed companies,and helps to improve the emphasis on risk management of Chinese listed companies when choosing cross-border mergers and acquisitions.,So as to reduce the risk of cross-border mergers and acquisitions in the decision-making of the corporate management,which will help my country’s listed companies to reduce the hidden dangers caused by risks from the root cause.