A Study On Corporate Financing Methods And Economic Consequences Of Chinese Enterprises’ Overseas M&A

After several years of trade wars,Chinese companies’ enthusiasm for overseas mergers and acquisitions has once cooled down.However,in 2020,China proposed to "deepen supply-side structural reforms and build a new development pattern of domestic and international dual cycles." Chinese companies must not only pay attention to domestic demand,but also It should also lay out the international market and improve the construction of the industrial chain.Overseas mergers and acquisitions are a key point that cannot be ignored in the international cycle.As China further promotes high-level institutional opening up,Chinese companies will increasingly go abroad to carry out cooperative mergers and acquisitions with foreign countries.M&A financing is a key factor that determines the success of a company’s overseas mergers and acquisitions.A good financing method is conducive to reducing the cost of companies going overseas,increasing the success rate of mergers and acquisitions,and promoting the construction of a company’s global industrial chain.China’s capital market started relatively late,the government has stricter supervision,and the application of corporate overseas M&A financing methods is still in the exploratory stage.At present,Chinese companies mainly use traditional single financing methods for overseas mergers and acquisitions,and seldom adopt financing schemes that combine multiple financing methods.This is in sharp contrast with the developed western capital markets.Mergers and acquisitions in Western capital markets usually avoid using a single financing method,and tend to use mixed financing methods,and thus achieve good economic consequences.The choice of financing methods is crucial to the success or failure of overseas mergers and acquisitions.Chinese enterprises should pay attention to the exploration of financing methods in the process of overseas mergers and acquisitions,and maximize the economic effects of overseas mergers and acquisitions through innovative financing methods and reasonable financing arrangements.This article selects Qumei Home Furnishing’s acquisition of Ekornes,Norway as a research case.Qumei completed the largest acquisition in China’s current home furnishing market in five months in 2018,which has a significant impact on the entire M&A market and the international home furnishing market.At the same time,from the merger announcement issued by Qumei Home Furnishing,the design of its financing method is quite innovative.It adopts diversified hybrid financing methods,introduces joint investors,and conducts in-depth exploration and analysis of the case,which can provide reference and experience for China’s overseas mergers and acquisitions.Therefore,this article plans to carry out research from the following parts: First,it explains the relevant theories and research results of domestic and overseas mergers and acquisitions financing,and then analyzes the current status and existing problems of China’s current overseas mergers and acquisitions financing.Then,this article sorts out the financing process of Qumei Home Furnishing M&A case,and analyzes the choice of this merger financing method from two levels of financing method analysis and economic consequences evaluation.Finally,draw the conclusions and enlightenment of this article.After multi-level analysis and exploration,this article draws the following conclusions on the financing methods and economic consequences of overseas mergers and acquisitions:(1)The use of diversified financing methods can reduce corporate financing costs and bring good economic consequences to the company;(2)Actively proceed The innovation of financing methods and financial tools can ease financing constraints and increase the success rate of corporate mergers and acquisitions;(3)China’s capital market should be further opened to provide a good institutional environment for companies to go overseas for mergers and acquisitions financing.