Researches On Risk Assessment Of Enterprise Cross-border M&A

In recent years, with the development of national economy, our country arise anew wave of cross-border M&A, many enterprises which have strong economicstrength began to go abroad and seeking acquisition targets actively. After thefinancial crisis, the pace of the global economic development slowdown, and manyenterprises in developed countries drop into business crisis, and the stock price ofthese enterprises also fall seriously. In order to overcome the crisis these enterpriseshave to seek a new solution, which provide a very good external condition for ourcountry’s enterprises to invest abroad and participate in cross-border mergers andacquisitions. For a long time, our country’s enterprises have faced a lot of risk whenthey participate in the international competition and implement the cross-border M&Atransactions, and many companies inevitably encounter the failure situation onmergers and acquisitions. The failure of any M&A activity have same reason, that isthe enterprises don’t have enough evaluation and control on the M&A risk. The studyof the assessment of enterprises cross-border M&A risk, which enriching the theory ofrisk management about enterprise cross-border mergers and acquisitions, and itbeneficial for the enterprises to realize international business, and have very importantpractical significance in implement the cross-border M&A transactions successfully.For these reasons, after introduce the background, objective and significance ofthe research, the article analyze the enterprises cross-border mergers and acquisitionswith principal-agent theory, asymmetric information theory, trade-off theory,transaction cost theory, the theory of efficiency, low-cost and low-risk expansiontheory, the theory of market power and the theory of acquire resources. Then thispaper discusses the risk evaluation theory and method of enterprise transnationalM&A, and provide a analysis of the current situation about our country enterprisetransnational M&A, through review the literature about the risk of the enterprisetransnational M&A, and provide a demonstration of enterprise transnational M&Acombined with the typical case. This paper adopts the recognition method in stages,and provide a analysis about the factors which influence the risk of our country’senterprise transnational M&A, think the risk of enterprise transnational M&A can bedivided into three stages that is the risk of strategy decision analysis stage before theM&A, the risk of integration stage and the risk of management phase after M&A, and analyzed the specific factors of each stage risk. On the base of which, the articleconstructing the evaluation index system of the enterprise transnational M&A risk,and introducing the Hierarchical analysis-fuzzy comprehensive evaluation model toevaluate the risk of enterprise cross-border M&A. Finally we test the practicabilityand validity of the method combined with a cross-border M&A case.