Cross-border M & A Legal Risk And Its Prevention Response

In last three decades, Transnational Mergers & Acquisitions (Transnational M&A) activities have gradually become a world trend and the major foreign direct investment (FDI) means, substituting the green investment, and have greatly influenced the economy of the world in the process of economic globalization. For the information asymmetry and other causes, enterprises are confronting all kinds of risks which have caused major Transnational M&A into failure. Among these risks, legal risks caused by different laws controlling Transnational M&A of different counties have inevitably made great negative influence on Transnational M&A.This thesis discusses the failure of Transnational M&A from legal risks. I hope this thesis to fill some blanks in the area of Transnational M&A, prevention of legal risks, countermeasures and evasion measures, which value much theoretically and practically. First of all, the thesis analyses the basic questions of legal risks in Transnational M&A, clarifies some related concepts, confirms the research scope, points out the negative influence of legal risks on Transnational M&A, and has find out the reasons. Afterwards, the thesis analyses the legal risks from the aspect of department law, summarizes the legal risks caused by department law contrulling Transnational M&A. By introducing and commenting on some lost examples, this thesis analyses the negative effects of these legal risks, and proposes evasion measures. This part focuses on the legal risks caused by anti-takeover measures and antitrust law. At last, on the base of these analysis, the thesis proposes some concrete countermeasures including careful investigation, legal risks management, post merge intergration.This thesis consists of five chapters. The following is the main content of each one.Chapter one explains the connotation, extension and characteristics of Transnational M&A, then interprets the concept of legal risks in Transnational M&A and analyzes different legal risks, which ascertain the study range of the thesis.Chapter two analyzes the legal risks caused by anti-takeover measures taken by target enterprises. Anti-takeover measures, as one kind of the self-protection measures of target enterprises, are permitted, to a certain extent, by laws of every country. These measures are stipulated in laws, exist in the constitution of target enterprises, or launched by enterprises when the danger of M&A occurs. Anti-takeover measures increase the uncertain factors, the M&A cost, and decrease the selectable range in M&A.Chapter three analyzes the legal risks caused by antitrust laws of host countries. Through the establishment of regulating system of M&A in antitrust laws, host countries can examine international M&A which may cause monopoly, and can overrule them directly or increase the cost and difficulty of them through miscellaneous and trivial applying procedures and investigating procedures.Chapter four analyzes other legal risks including company legal risks and securities legal risks which increase the M&A cost and peoduce new competitors, foreign capital legal risks which forbid M&A in certain industries and interpose special investigating procedures, and special legal risks which are unforeseeable to the M&A enterprises.Chapter five analyzes the concrete countermeasures dealing with legal risks. M&A enterprises should investigate target enterprises and assess the legal risks carefully before their M&A activities, choose suitable M&A model and agreement and carry out evasion measures not breaking the laws in their M&A activities, and operate well post merge intergration. The intermediary organs and the country where the M&A enterprise locates should also play an imoirtant role in copeing with above legal risks.