| In today’s world cross-border mergers and acquisitions have occurred more and more frequently among the various countries, increasingly extending the scope of the transaction,and the transaction amount is rising quickly, especially in the United States, Western Europe and other developed countries, M&A amount has reached the number of megabytes billion dollars. Mergers and acquisitions can enhance the scale expansion of market scope obviously, which is the only way for the Chinese companies achieving development and growth. In2011, the wave of mergers and acquisitions sweeping the world, according to the famous Big Four accounting firms,Pricewaterhouse Coopers,its report shows that, in2011the number of cross-border mergers and acquisitions of Chinese enterprises and the transaction amount goes to a new one, while the number of transactions reached207and the total amount is as high as S429. In this following2012, there are that no signs of weakening,. But in the current economic structure, the external environment remains in the doldrums. For the enterprise to mergers and acquisitions, there is a lot of potential risks. According to Western social research statistics, the cross-border mergers and acquisitions failure percentage is more than50%, and there were many huge M&A failure cases. Since China’s accession to the WTO, cross-border mergers and acquisitions for Chinese enterprises grows very rapidly in the number and size. Through cross-border mergers and acquisitions, Chinese enterprises can participate in the development of world economy to achieve a better allocation of resources to gain more benefits.Multinational mergers and acquisitions may face risks, and it is very necessary to take some preventive measures for these risks. I will divide this paper into six parts, in the first chapter we discuss the significance of the topics, ideas and research methods and the research background, combining with the overall framework structure of this article,At last, I summarize the possible contribution of the entire article and insufficience. In the second chapter, we review the research outcome at home and abroad, reviewed the previous M&A risk theory, the author found that by reviewing previous research on cross-border M&A risk, cross-border mergers and acquisitions is a very popular topic at home and abroad. Many scholars have achieved deep studies.In the third chapter, this article discusses the risks of cross-border mergers and acquisitions, these risks include economic risks, social environment risks and financial risks. In the economic risks include asymmetric information, foreign exchange risk. Cross-border mergers and acquisitions are likely to face some of the provisions set by some countries in order to protect the country’s economic, so it is not fair competition with domestic enterprises in cross-border mergers and acquisitions, which is the social environmental risk I talk about. Then talked about the financial risk, which is the main risks of problem I study. I classify the risk into asset, liability risks, financing risks, anti-takeover the risk and payment risks. In fact, the risk of theoretical research in the article is limited, main reason is due to the limit of the length of the article, following by the starting point of this paper is to study the common risk of cross-border mergers and acquisitions, so just talk about these risks listed above.The fourth chapter describes the identification of risk, including the investment environment analysis, financial analysis, Delphi method. Investment environment analysis mainly focused analysis of the economic and social environment risk, financial analysis focus on financial risks, the characteristics of these two methods is that the results of the analysis can be quantified, so it is easy for us to make a clear investment decision. The Delphi method is a feedback method, this method can analyzed economic environment, social environment or financial environment separately, you can also conduct a comprehensive environmental analysis.In the fifth chapter of this paper, I analyze the acquisition of Volvo Geely. I analyze of the risks Geely may encounter in the acquisition process, risk identification method, the measures taking to avoid risks. But as a general researcher, due to the limited information that can be collected, I cannot apply my theory into my case. With the focus on the entire process, we can easily find that Geely has taken some effective measures to avoid the risks. In the end, I summurize these measures.The last chapter focuses on theory about how to avoid the risk of cross-border mergers and acquisitions. All these measures is in correspondence with the risks before. The sequence is about the economic environment, social environment and financial environment risk circumvention measures. In this way, the article reach integrity and the measures echo the previously mentioned risks.The main contribution of this paper is that1) the risk identification method described in the text includes not only the economic and social environment, but also describes the identification of financial risk, these methods are not only quantitative analysis methods, also includes qualitative analysis methods for enterprises who want to cross-border mergers and acquisitions old said, provides a variety of analytical methods.2) select case with timeliness, M&A transactions in the Geely and Volvo has just been completed, this cross-border M&A activity is the first domestic automobile industry event, the concern of the entire acquisition process can provide experience for the companies wanting to take mergers and acquisitions. Chinese auto companies will have a clear understanding of the risk encountering during the entire acquisition process.3) explore the risk prevention and the preventive measures to cope with various risks, including select the appropriate M&A business in M&A process, purchasing the appropriate insurance to avoid the social environmental risks, and also talked about the risks encountered in financing, payment method.Of course, in the course of the study, the author also found that due to limited space constraints as well as the own academic capacity, research on cross-border M&A risk also exists some disadvantages, the most obvious types of risks in the case of cross-border mergers and acquisitions certainly more than we list, the paper selected some major and common risks in the process of mergers and acquisitions. The second is in the process of case studies, the data, information is company confidential, and cannot be fully analyzed in accordance with the various risk identification method. The author only can analyze based on what I can grasp. A very important point in the actual acquisition process is the mental game of both parts, which is difficult to get. For the later researchers, I hope they can compensate for these deficiencies. |
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