Research On Chinese Company’s Finance Risk In M&A

With the development of economic globalization, transnational M&A hasbecome the main way of international direct investment.Due to national strategy of"going out" and Europe&USA’ economic weakness, many companies rapidly andfrequently make oversea mergers and acquisitions. Currently, M&A has becomeresearch hot spots in economic theory.Although our enterprises’ transnational mergerand acquisition activities have become more and more frequent, overall results andeffects are not so good. Why are the effects of mergers and acquisitions not so good?Based on this problem, my paper does deep studies,and think the main reason thatChinese enterprises’ transnational M&A is not so successful is bad management offinance risks in cross-border M&A. Because enterprises’ transnational M&A is amultinational finance activity, and every decision in M&A can influent financialsituation by M&A’s cost. So, based on the point of view, combining with the currentinternational background, paper selects financial risk of Sany company mergerPutzmeister as the research object.After analyzing case,we found that after M&ASany company had serious financial risks, then reflect the whole process of Sanycompany merger Putzmeister.Finally,paper puts forward corresponding feasiblemanagement and control suggestions, hoping the other enterprises in financial riskcontrol of cross-border M&Acan get some useful references and enlightenments.According to the merger process,the article respectively identify possiblefinancial risks in transnational M&A, and accordingly put forward the enlightenmentsabout financial risks’ management and control. In this paper, the research shows that:(1) before the merger, company should carefully select the target enterprises,accordingto their own strength.(2) in mergers and acquisitions, company need to take a varietyof financing means of payment and flexible way of mergers and acquisitions to reducethe risk of mergers and acquisitions.(3) after the merger, through the establishment ofthe financial early warning management system, enterprise spin-off (stripping ordivision), legal agreements, improving the stability of the target enterprise’future cashflows to control the financial risk of merger.