Research On The Financial Risk Of Cross-border M & A Of China’s State-owned Enterprises

With the development of the world economic situation and social progress,the trend of global economic integration has become increasingly prominent.In order to adapt to the inevitable needs of the development and growth of enterprises under the current global economic and technological structure,while my country has gradually improved its opening to the outside world with the priority of ensuring the stability of its own market order,Chinese enterprises have also adapted to the overall economic situation of the world.M&A as the main means,and a globalization strategy that meets its own development needs.Although private enterprises in my country have replaced state-owned enterprises as the main force in the cross-border M&A market,large-scale and important mergers and acquisitions are almost completed by state-owned enterprises.It is very important to realize "going out" to "going up".Therefore,it is necessary to explore the financial risks of state-owned enterprises in cross-border mergers and acquisitions.This paper adopts the method of combining literature analysis method,case analysis method and efficacy coefficient method to study the problem of financial risk faced by Chinese state-owned enterprises in cross-border mergers and acquisitions.Starting from the related concepts of state-owned enterprises and crossborder mergers and acquisitions,the article first determines the theoretical basis required for subsequent analysis,and then takes China National Chemical Corporation’s merger and acquisition of Syngenta as an example.The changes in financial risks before and after the implementation of cross-border mergers and acquisitions by the chemical group and the qualitative analysis of its sources of financial risks are summarized to conclude the risks faced by Chem China when it merged with Syngenta and the measures taken to deal with them.characteristics,generalize the conclusions to the state-owned enterprises as a whole,and put forward corresponding suggestions.This paper finally finds that the financial risks faced by state-owned enterprises in cross-border mergers and acquisitions mainly come from four aspects: insufficient time and difficulty in determining the target enterprise,easy to miscalculate the value of the target enterprise,inflexible financing,single payment method and difficulty in financial integration.The measures that can be taken at different stages of mergers and acquisitions to avoid the above financial risksIn the early stage of mergers and acquisitions,state-owned enterprises can employ independent third parties to conduct due diligence and value assessment to prevent the risks of unclear target companies and overestimation of target companies’ value.possible financial losses.In the mid-term of mergers and acquisitions,stateowned enterprises can solve the financing and payment risks they face in the middle of mergers and acquisitions by adopting a variety of methods,such as establishing an effective transaction structure,refinancing,actively expanding financing channels,and flexibly using financial derivatives,so as to alleviate the risks of mergers and acquisitions.The corresponding financial risks can be solved by means of various pressures such as debt and cash flow brought about by the subsequent operation of the enterprise.Ultimately,in the late stage of mergers and acquisitions,state-owned enterprises should promote cultural fusion and complete financial integration while ensuring the independence of the target companies,so as to reduce the financial risks of cross-border mergers and acquisitions.At present,the research on cross-border mergers and acquisitions of enterprises at home and abroad mostly focuses on private enterprises,and a small amount of research on cross-border mergers and acquisitions of state-owned enterprises is also based on a relatively macroeconomic and management perspective.Therefore,the contribution of this paper is to analyze from the perspective of finance.The difficulties faced by state-owned enterprises in cross-border mergers and acquisitions,the proposed measures are more specific,but due to the difficulty of collecting specific information on cross-border mergers and acquisitions,the various financial risks found in this paper and the corresponding improvement suggestions for mergers and acquisitions proposed May not be comprehensive enough and could be improved in follow-up research.