Risks In Chinese Automobile Enterprises Transnational Mergers And Acquisitions

The auto industry in China has been developing fast since the21stcentury. In2009,China became the world’s automobile production and sales superpower, and the productionand sales of China’s auto both exceeded19million in2012. Automotive powerhouse,however, does not mean that a car power, China’s auto industry started later comparedwith developed countries, so there is still a gap in capabilities, overseas marketing, brandvalue between China and development countries. With the acceleration of the economicglobalization and China’s auto companies development, a growing number of car autocompanies have chosen to cross-boder mergers and acquisitions to expand market share,enhance its international image.With the complicated international economic situation, how to identify and evaluateand then reduce the risk of cross-border M&A is an urgent problem for Chinese enterprisesin an M&A activity. In this paper, with the object of risk in M&A, the research goes withthe mainline of the process of M&A and studies the risk identification and evaluation. Themain methods in the research are the combination of normative analysis and empiricalanalysis, qualitative analysis and quantitative analysis method, and several cases aresupplemented in this analysis. The analysis believes the risks that China’s auto enterpriseswill face in M&A are: political risk, legal risk, and strategic during decision-making;enterprise pricing risk, financing risk, financial risk and anti-M&A risk during theimplementation of the strategy and risk of cultural integration, human resources integrationand operational integration during merger integration. The paper presents a fuzzycomprehensive evaluation method to evaluate the risk.Finally, the measures andsuggestions are given for each of the risk.