On Legal Risks Of China’s Enterprise In Overseas Merger And Acquisition

Overseas merger and acquisition is likely to be one of the most important methodof multinational operations for China’s enterprise as China has entered WTO andespecially under the influence of global economic crisis and recession which providedgreat opportunities for China’s enterprises that suffers little. As a consequence, thereis going to be a climax of merging and acquisition for China’s enterprise in thefollowing years.However, challenges accompany with opportunities which determines thatChina’s enterprise will not be smooth and come across unknown risks when mergingand acquiring overseas. Therefore, how to overcome those obstacles is the key to thesuccess of merging and acquisition. Among those obstacles, legal risk which is theobjective of this research, not only determines the initiation, proceeding andintegration of merger and acquisition directly, but also the success of the overalltransaction.After defining the content of enterprise’s merger and acquisition as well as legalrisk, this paper conjectured probable legal risks, such as reviews regarding marketaccess, anti-monopoly, national security and nationalization of host countries, duringthe process of overseas merger and acquisition according to cause analysis on thebasis of mainstream theories. Hence, legislations and policies supporting overseasinvestment plays a vital role as well as constantly perfection of governance structure.Currently, the pace and effectiveness of overseas mergers and acquisitions of China’senterprises is far from ideal as the deficiency of support from the government whichdetermines that how to enhance the capability of risk prevention from bothperspectives of the government and enterprises is cutting-edge issue that requiresimmediate attention and solution.