Chinese Appliance Enterprises Financial Risks Control In Transnational M&A

In recent years,the competition in Chinese household appliance industry is fierce,with declined enterprise market profits,besides,the demand for newly required household appliances has reached a saturated state.Facing the market dilemmas,it is necessary to pursue new growth impetus and explore new development opportunities.In the current environment,the development of global economic integration,transnational M&A often make rapid expansion of enterprises,occupying of international status,obtaining of international resources,and promote the diversified development of enterprises.From 2018 to 2020,the number of transnational M&A of enterprises in China is about 1155,with the amount as high as 236.97 billion US dollars.Many enterprises join the wave of transnational M&A every year.However,due to my country’s insufficient experience in transnational M&A,the success rate of companies in successfully completing transnational M&A is not high.Nearly 70% of M&A activities ended in failure.So there is a risk of transnational M&A is absolutely not be ignored,these risks will eventually be converted into financial risk,the formation of the financial costs.Only good financial risk management and control of transnational M&A,transnational M&A activity in order to promote the success of the enterprise as much as possible.Therefore,it is of practical significance to study the financial risk control of transnational M&A of household appliance enterprises in China.Through case analysis,comparative analysis,Z-Score analysis and other methods,this paper mainly analyzed the financial risk control of transnational M&A of household appliances enterprises in China based on M&A of GE Appliance by Qingdao Haier.Firstly,by reading a varied of literatures,synthesizing the research results of transnational M&A of enterprises by domestic and foreign scholars,the transnational M&A,financial risks and other related contents were describe;secondly,the development status of domestic appliance enterprises in different time periods in China was analyzed,and the current situation of transnational M&A of domestic appliance enterprises were summarized in combination with the case of transnational M&A in China;thirdly,by introducing the case on M&A of GE Appliance by Qingdao Haier,the financial risks at different stages were analyzed according to the time sequence of M&A events,that is,the preparation stage,implementation stage and integration stage.Among which,the pricing risks were mainly identified and controlled in the preparation stage,and the accuracy and rationality of the pricing was analyzed and evaluated using the comparable trading method and comparable company law.The financial data before and after M&A of enterprises were compared in the implementation stage,and then the financing risks and payment risks were controlled and evaluated.Finally,the Z-Score model as used in the integration stage to determine the bankruptcy risk of Haier after M&A;This paper put forward corresponding enlightenment for the prevention of financial risk control in the transnational M&A of household appliance enterprises in China.The research and analysis of this paper show that the establishment of scientific cross-border development strategy,reasonable usage of intermediary institutions,targeted and planned M&A,selection of appropriate financing and payment methods,and reasonable integration in finance,resources,personnel management,etc.Which can be able to reduce effectively or avoid the financial risks of household appliance enterprises in the process of transnational M&A,and different measures should be taken at different stages to carry out effective prevention or control,summarize successful experiences,learn lessons from failures,and improve the success rate of transnational M&A of household appliance enterprises in China.