Foreign M & A Legal Risk Study

Since the 1980s, with their own unique advantages , mergers and acquisitions(hereinafter referred to as M&A) have replaced the greenfield investments (new enterprise building) and become the worldwide international mainstream form of direct investment. Some experts predict that in the next 20 years, China's foreign investor's M&A will become the main form of the introduction of foreign investment, M&A will also be more diversified approach. But M&A is a high-risk investment activities, and therefore, it is necessary to have calm and rational analysis of the possible legal risks in the foreign investor's M&A, such as which legal system is M&A activity regulated by, which relationship of rights and obligations is involved, what legal obstacles will appear and what legal consequences will be cause. Anyone of the M&A by foreign investors will involve legal issues, and some even involve the complicated legal obstacles and legal difficulties.In this paper, the writer uses the law, economic analysis and comparative analysis, empirical analysis to study the legal risk of present practice of the foreign investors' M&A which has emerged and possibly emerges, take the different risks and preventive measures in the M&A faced and taken by Chinese and foreign sides as the main line, from the macro and micro level, domestic and international at the multi-level and the multi-angle to analyzes and concludes various legal risk in the foreign investors' M&A, at the same time it learns from the legislative and practical experience of developed and developing countries to have Analysis and give advice of the improvement of the normative and practical operation and our related legal system .Except the introduction, this paper is divided into four parts, a total of about 38,000 words.The first part is concerning mainly on the basic theoretical issues of the M&A.It is the basic part of the paper. First, it defines the concept of the foreign investors' M&A, and compares it with overseas M&A, transnational M&A. Then it explores the rationale classification of the foreign investors' M&A and the classification of China's adoption of the law. Second, it defines the legal risks of foreign investors' M&A, summarized and discussed the the characteristics of the legal risks.The second part through micro and macro levels has detailed analysis of the legal risks faced by the Chinese part and the foreign part. On the one hand, this paper from the micro level, through summarizing of the normal procedures of foreign M&A, progressively analyze the legal risk in different stages . In order to maintain the systemic papers and the accuracy, the legal risk in different stages faced by foreign investors and Chinese party together are classified into the item of risk faced by the foreign part, but when it discussed there is special note. In this paper, the micro analysis on the legal risks faced by the Chinese side target through internal faced by the different legal risks for the analysis of the clues will start. On the other hand, start from the macro level, through the political and institutional risks, legal conflicts, as well as anti-acquisition analysis to explore the macro legal risk faced by the foreign part. From the perspective of Economics and Law at the same time to detailedly analyze Chinese state-owned assets loss and the industrial monopoly caused y the foreign investors' M&A, as well as the risk triggered by super-national treatment , and multi-angle prove on the macro - legal risk faced by Chinese side.The third part analyzes the cause of legal risks in the foreign investors' M&A, so it is the further deepening of the full text. At first, based on the research of host and home country foreign investors' M&A legislation, as well as M&A legislation of domestic and international it analyzes the cause in the legislative level. Then, it analyzes special policies of the local governments and legal risk management mechanism of enterprises in China, as well as the characteristics of the investors' operation to explore the reasons in the operational level triggering the risk.Part four discusses the measure of preventing and controlling of legal risks in the foreign investors' M&A. It is also the ultimate goal of the theme. Through the previous analysis of the legal risk faced by different parties in different level ,this part conclude the measure of preventing and controlling of legal risks in the foreign investors' M&A ,taken by different sides, and assumes the framework of the international harmonization of laws to control the legal risk. This part takes the comparative analysis method, and explores developed and developing countries' law on foreign investors' M&A, and found the referenced model used for China's relevant law's improvement.