Financial Risk Management And Control Measures Of Cross-Border Mergers And Acquisitions Of Chinese Enterprises

From the1980s, China has carried out cross-border mergers and acquisitions activity. In recent years, the domestic competitive pressures increase. Because of the RMB appreciation and trend of global economic integration, the intentions for cross-border mergers of the Chinese enterprises are stronger. In recent years, cross-border mergers and acquisitions has been surging among Chinese enterprises. According to the report of JP Morgan Chase, the first half of2010, China’s M&A transactions as the acquirer after the United States, ranked second worldwide. According to China’s Ministry of Commerce statistics show that in2011, Chinese enterprises to acquisitions overseas investment grew by54%. Cross-border mergers and acquisitions of Chinese enterprises have become the mainstream of the international cross-border mergers and acquisitions. Cross-border mergers and acquisitions of Chinese enterprises in the future will continue to maintain the growth trend. However, cross-border mergers and acquisitions is full of risks, the slightest mistake will make corporate disastrous bankruptcy. According to the statistics of the Deloitte2010M&A report, more than50%of the Chinese enterprises overseas M&A transactions is not successful, and can’t reach the bottom line of value-added. The risk of cross-border mergers and acquisitions of Chinese enterprises are more complex and numerous, financial risks run through the entire process of mergers and acquisitions, and are cross-border mergers and acquisitions performance of the various risks on the value.This study mainly on the basis of previous studies, introducing of AHP and leverage analysis model, combining the system theory and case study, puts forward some reference strategies for the risk control to the follow-up of the cross-border mergers and acquisitions of Chinese enterprises on financial risk management practice. This paper is divided into five parts:in the first part, introduces the research background and the significance of this topic, the research situation at home and abroad and the research contents; in the second part, explains the current situation of cross-border mergers and acquisitions transactions and the financial risk control measures of the transactions, summarizes the risk types of transnational merger and acquisition of Chinese enterprises; in the third part, identifies and evaluates the financial risk of Chinese enterprises transnational merger and acquisition transactions, contrasts and sums up the evaluation models; in the fourth part, using hierarchy analysis, leverage analysis methods, combing the quantitative and qualitative analysis, analyses and sums up the control measures during ZOOMLION purchasing Italy Compagnia Italiana Forme Acciaio S.p.A overseas; in the fifth part, based on the above research, puts forward the reference countermeasures of financial risk control for subsequent Chinese enterprises cross-border mergers and acquisitions.