Selection Of Cross-Border M&A Financing And Payment In China

In recent years Mergers and acquisitions (M&A) has become the main form of FDI. More and more scholars of finance and accounting predominantly focused on the performance of M&A.And there are only a little research on the process of M&A which is undoubtedly important for the M&A.Payment in M&A is the last step of M&A, which is a key factor on the success of M&A, the results of empirical research-has beard this point too. This paper is a research on the payment-method of international M&A; it focuses on the choice of the payment method in international M&A. And this article is divided into two parts:theoretical research and applied research.In theoretical research, first at all, this paper defines the concept of M&A, and analyzes several of payment methods in M&A. Then we do the literature review after reading literatures. Besides, we make the economic analysis of how to choose the payment methods in M&A for the two parties of M&A, based on information economics theory, and some examples are involved in the article to make it more reliable.In applied research, this paper finished three targets based on the conclusion of theoretical research. First, we make a research on practice operation of the choice of the payment methods. First, we construct a decision model of the choice of the payment methods based on EPS. Then we analyze the key factor impacting on the successful implementation of every payment method. And get the conclusion that: because of asymmetric information, there is the problem of adverse selection in every payment method for both parties, the completion of the transaction in the reality is the result of the elimination of information asymmetry to some extent. Meanwhile, if the target company accept the payment-in-stock, there will be a principal-agent relationship between the target company and the acquiring company, so the target company will bear the extra agency costs compared to the accept of the payment-in-cash. Second, we analyzed the payment method of the M&A case between Lenovo and IBM. Finally, we give policy recommendations to improve the development of the payment methods and financing Method in M&A.