Financial Risks Prevention In Cross-border M&A Of Chinese Private Enterprises

Cross-border M&A of Chinese enterprises has become more and more frequent, mergers and acquisitions of overseas mergers and acquisitions may not familiar with the foreign market as the domestic market, the risk of cross-border M&A is bigger than the risk of domestic M&A. Focus on cross-border M&A risk, especially financial risk is particularly important. Financial risk of enterprises throughout the process of transnational merger and acquisition, acquisition of failures caused by financial risk is increasing. How to identify, control and prevention financial risks of cross-border M&A has become the most important issue of transnational business enterprises. Based on cross-border M&A financial risk theory, this paper in view of the situation of private enterprises cross-border M&A, analyzes the source of financial risk. In this paper, the current private enterprises transnational M&A financial risk prevention system are expounded. The paper analyzed two typical cases, Shuanghui’s acquisition of Smithfield and Geely’s acquisition of Volvo, then provide some suggestions for financial risk prevention.Private enterprises in our country is still in the primary stage of transnational M&A, presents the following features:small number, trading on a smaller scale; to expand market share and obtain the core technology as the primary factor; M&A targets for overseas companies in trouble; M&A mainly concentrated in the manufacturing industry, etc. Other private enterprises overseas mergers and acquisitions, the main problem with the examination and approval procedure complex, difficult financing, mergers and acquisitions lack of talent, low transparency policy restriction, legal policy, target company is difficult to choose, such as lack of integration experience. In general risk of transnational M&A based on the analysis of the source, this paper analyzes the private enterprises cross-border M&A specific sources of risk, risk prevention of the main problems and obstacles. Private enterprises in transnational mergers and acquisitions in the main by M&A decision-making phase of the target enterprise selection risk, stage of M&A financing risks, risks of merger integration. Private enterprise risk prevention of the problem is the lack of risk awareness, experience, strategy and system; Is also influenced by government policy, such as the examination and approval procedure complex, lack of financial support policies, etc. Based on the above analysis, this paper puts forward the corresponding measures to prevent risks, strive to make private enterprises to minimize the risk of M&A.