The Study On The Risk Of Cross-border Merger And Acquisition Of Chinese Auto Enterprises

The auto industry in China has been developing fast since the 21st century. The total number of auto production and sale is more than 13.6 million in China in 2009 and China became the largest country in this field. But the largest doesn't mean the strongest. Compared with the developed countries in auto industry, China still has a long way to go in usage of resources, overseas marketing, R&D, brand influence and so on. With the development of economic globalization and the expanding scale of auto industry in China, more and more Chinese auto enterprises implementation overseas M&A. M&A is an important business approach for external growth, the transaction object of which is property rights, through the transfer of ownership and control over the enterprises and the reorganization of assets in order to achieve corporate profit growth. M&A is a high-risk capital activity in view of characteristics of itself and the failure common cases in the process of M&A. The risk is especially high for enterprises of China that want to have overseas M&A, because of their poor international management, less experiences and low success rate. The improper handling of risk of M&A can bring the enterprises and our country great loss.In the complicated international economic environment, it is an important and urgent question for enterprises in China to think about that how to identify, evaluate and evade the risk of overseas M&A in order to improve the success rate. This paper summarize the experiences of overseas M&A of the major auto enterprises in the world on the basis of research results from scholars from home and abroad, and make a thorough analysis on the history, current status, characteristics and motivation of transnational M&A of Chinese auto industry. What's more, this paper analyses and identifies the main risks Chinese auto enterprises confront in the preparation, the implementation and the conformity phase of M&A. And the paper made a evaluation on the risks of Chinese auto enterprises overseas M&A in the way of Scholar Evaluation Method. At last, this paper gives some advices and suggestions on how to keep away the risks for our auto enterprises from macro and micro perspectives in order that it can provide a beneficial reference for our auto enterprises during the process of overseas M&A.