Study On Risk Management Of Cross-border M&A Of Our State-owned Key Enterprises

With the deepening of economic globalization, cross-border M&A has become an important way to resolve contradictions and help access to resources and techniques to enhance international competitiveness. The rise of our state-owned key enterprises’ M&A wave adds a beautiful landscape for the global market. This dissertation studies the risk of our state-owned key enterprises’ cross-border M&A. Combining the characteristics of our state-owned key enterprises, we add two factors, the lack of core technology and corporate governance into Bruner’s risk frame.This dissertation examines113enterprises’ announcement during2003-2012. It shows that:with the experience improving and the competitiveness increasing, the failure rate declined, but still much higher than that of developed countries. No matter from the proportion or the amount, it concentrates on the resource-based enterprises, which is high monopoly, and mainly occurred in North America, Western Europe and Asia-Pacific. Among them, The Asia-Pacific region is the focus of the early M&A, the failure of which is mainly due to the lack of experience. For North America and Western Europe, the failure is caused by high political risk due to the sensitivity of the industry and the special background of our state-owned key enterprises. Besides, the lack of core technology made some enterprises lack advantage in negotiation, and be not able to cover the cost after the M&As.After that, it employs the improved Bruner’s risk frame and an evaluation system, supported by the acquisition of Nixon by CNOOC case evidence.Above all, it argues that political risk due to enterprise systems and corporate governance is particularly prominent among all. Meanwhile, any single risk factor is not sufficient enough to lead to failure, but all of them, being a basis one, are likely to destroy everything through their close contraction. Notably, all of the factors can be attributed to "human" factor, which reminds us that we should focus on "human" to minimize risk. Thus, we can learn from the experience of developed countries, build our own support system and rely on the efforts of our state-owned key enterprises.