Research On Financial Risk Pre-warning Of Corporate Cross-border Merger And Acquisition

Since 21st century, with the execution of "walking out" strategy of Chinese corporations, cross-border Merger and Acquisition has become a great attention of the whole society. Chinese corporations begin to search for target ones in numerous developed countries and developing ones, and not only limited to medium and small local ones. However, there exists low succeeding rate behind high occurring rate of cross-border M&A. According to statistics of the famous American corporate management institution-Kearney Corporation, only 20% corporations succeed while others are all failed. Thus, how does the buyer, the main bearer of the risk, control financial risks in the M&A? The existing theory consists of two parts: one is the theory of M&A, and another one is enterprise financial theory. The theory of M&A emphasizes the way to maximize the value of enterprises when risks are certain, but neglects the management of financial risks in M&A. The enterprise financial theory emphasizes the process of risk policy making of one party when risks are uncertain, but pays no attention to the interactive risk pre-warning. Nowadays, the corporate pre-warning developed from Army, means when corporations deal with all kinds of inner uncertainties, it transfers all information through inner routes, and then gradually produces the output.Entitled Pre-warning Study of Financial Risks in Cross-border M&A and focusing on the origin and pre-warning of risks in M&A, this thesis tries to combine the modern enterprise financial theory with uncertainty analysis as its theme with the corporate pre-warning theory, and establishes a theoretical frame of cross-border M&A risks pre-warning under the uncertainties. The main ideas of this thesis are as follows.First, Starting from the analysis of cross-border M&A, this thesis redefines the financial risks of cross-border M&A and points out that financial risks of cross-border M&A is the general reflection of various M&A risks on the amount of value, a collection of value risks aroused by financial policy making including price-fixing, funding and payment.Second, this thesis tries to establish a theoretical frame of risk pre-warning under a range of uncertainties. The frame consists of two parts. First, seen from the process of cross-border M&A, risk pre-warning must run through all the stages of M&A including the design, implementation and reorganization, especially, the price-fixing, financing and payment during the implementation. Second, seen from the trade policymaking, risk control must be carried out dynamically based on informationtransmission and the strategy for cross-border M&A must be adjusted according torisks pre-warning indexes.Third, this thesis introduces corporate pre-warning theory into the frame of financialrisk control, and puts forward that controlling risks through establishment of riskindexes.Fourth, this thesis analyzes the origin of risks in various processes and the factors thatproduce uncertainties with price-fixing, financing and payment as the clues, and statesthat the ways and measures of risk control are of practical significance to cross-borderM&A.