| Since reform and opening up, China enjoys a rapidly economic development, and enhanced its national strength significantly. It was in 1984 that Chinese enterprises firstly participated in cross-border mergers and acquisitions, and since China's joining in the WTO in 2001, its enterprises became actively participating in international investment market, and foreign investment grew rapidly. With the same time, problems of risks appeared to Chinese companies. Recent years, the problem of country risk in cross-border mergers and acquisitions among Chinese enterprises became prominent. Thereupon, attention should be paid to figure a way to protect our enterprises from country risk. This paper will focus on cross-border mergers and acquisitions and its corresponding country risk.The paper builds a country risk control system of cross-border mergers and acquisitions to provide a measure to the enterprises that participate in the field. The system provides a country risk management models through three aspects, namely country risk information collecting, country risk assessment, and control measures of country risk. Then the control system is tested in the case of China Petroleum, three target countries are selected for the application. In the information collecting of the control system, the paper summarizes the information of overall and the information in details, and sorts out the institutions and organizations which provide the relevant information for the enterprises to facilitate. The paper selects important country risk indicators for cross-border mergers and acquisitions firstly, and then uses AHP to build a hierarchical model and assess country risk. Finally the paper also provides some methods of how to prevent the country risk base on the result of the assessment. The system provided can be put in practice by the enterprises that participating the cross-border mergers and acquisitions. The paper has a practical meaning for the cross-border mergers and acquisitions in the future. |
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