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Study On Legal Risk Of Mergers And Acquisitions Abroad And Countermeasures Keeping It Away

Posted on:2009-08-27Degree:MasterType:Thesis
Country:ChinaCandidate:G P LiFull Text:PDF
GTID:2166360242470237Subject:Economic Law
Abstract/Summary:PDF Full Text Request
In 2005, the amount of M&A abroad occupies 53% of the net amount of direct investment abroad in China. It is obvious that M&A abroad has become the main manner of direct investment abroad. M&A abroad is a kind of direct investment abroad through which domestic Chinese enterprises and the Chinese enterprises abroad controlled by them acquire the assets or operation mastery of the enterprises abroad by means of purchasing their stocks or assets,which including share and share exchange. But it is not smooth to finish M&A abroad for Chinese enterprises, one of the biggest promblems is legal risk. In the author's opinion, the legal risk of M&A abroad refers to as that in the procedure of M&A abroad the M&A activities fail to meet the requirements of the laws and regulations governing M&A in the the mother country of the target enterprise, which may result in the posibility that the acquiring party suffers bad aftermath. Legal risks of M&A abroad may, according to different standards, be classified into legal risk exterior the enterprise and legal risk interior the enterprise, legal risk happened before the finishing of the M&A and legal risk happened after the finishing of the M&A, common legal risk and additional legal risk. The reasons why the legal risk occurs can be summarised into three points, the enterprise's activities of M&A abroad is not inappropriate, other risk in the mother country of the target enterprise transfers into legal risk, and the existing laws and regulations in China relating to M&A abroad are not perfect to keep away legal risk. There are following problems in the existing laws and regulations in our country in respect of M&A abroad: the laws and regurations governing M&A abroad have some defects; the system supporting M&A abroad is not perfect; the system guaranteeing investment abroad is far from perfect; the bilateral convention of protecting investment in which china is a party can not protect M&A abroad sufficiently; and the system to encourage enterprise to make use of legal mechanism for settling international investment disputes is lacked. For the sake of finding out the countermeasures of keeping away legal risk which is suitable to China,this paper lists some countermeasures taken by other country to keep away legal risk of cross-boarder M&A, and with reference to those countermeasures, this paper advices the following countermeasures of keeping away legal risk of M&A abroad by using some researching methods in accordance with some special criterions: perfecting the laws and regulations governing M&A abroad; Pefecting the system supporting M&A abroad; Setting up the insurance system regarding direct investment abroad as soon as possible Pefecting and constituting bilateral conventions on protecting investment; Establishing relevant system to encourage the acquiring enterprise to make use of legal mechanism for settling international investment disputes...
Keywords/Search Tags:M&A abroad, legal risk, keep away, countermeasures
PDF Full Text Request
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