Cross-border Mergers And Acquisitions Of Chinese Enterprises Risk And Prevention,

Cross-border M&A is the inevitable trend of optimizing resource allocation and pursuing capital expansion facing the change of international business environment. Also, cross-border M&A is the important form of "Going out" strategy and the only way to becoming "bigger and stronger" for Chinese enterprises. Because of the global financial crisis which results from the sub-prime crisis in America, many Western countries'enterprises are in crisis and their market values have been seriously underestimated. Seldom Chinese enterprises conducted cross-border M&A and integrated successfully in the earlier time. Lots of failures in cross-border M&A remind us cross-border M&A is complex activity and will be affected by political, economic, cultural, legal and other multiple factors. In order to reduce the blindness and improve the success rate of cross-border M&A, it is practical significance to analysis the feature of cross-border M&A risk in financial crisis and build effective prevention mechanism.In the paper, the risk of cross-border M&A has been divided into three parts according to the steps of cross-border M&A. First part is strategic risk which includes political risk, policy risk, legal risk and strategic decision-making risk. Second part is implementation risk which contains financing risk and anti-takeover risk. Last part is integration risk which consists of cultural integration risk, human resources integration risk and business integration risk. Then I will construct a company's risk assessment model for cross-border M&A with AHP and fuzzy evaluation and test it with the case of Sichuan Tengzhong heavy industrial machinery purchasing Hummer. The result of testing shows that the most important risks of this case are policy risk, business integration risk and financing risk.In order to prevent the risk of cross-border M&A we should use the model to assess the risk first, allocate resources and focus the most important risk. Also, this paper presents the prevention of political risk and valuation risk in the course of cross-border M&A against the special environment of financial crisis.