| Since the1990s, China’s economy is booming. Especially after joining the WTO, China’s economic system becomes more and more open, and have accumulated large amounts of foreign exchange reserves in trading with many countries. Meanwhile, China’s GDP growth rate has remained above8%for many years, which is quite attractive to domestic and foreign investors, then international capital is pouring into our country. These phenomena lead to the domestic capital surplus, the appreciation of the renminbi, serious inflation. In order to alleviate these economic problems, the National Development and Reform Commission proposed a strategy of "going out". The aim of this strategy is to encourage the capable enterprises to go out of the country and invest overseas.In successive years of overseas investment practice, the performance of domestic enterprises is unsatisfactory. Mc Kensey’s statistics show that over the past20years, the amount of the world’s successful big takeovers is less than50%. As for the overseas investment situation of Chinese enterprises, the failure rate is as high as67%. The Ministry of Commerce’s statistics also show that the amount of Chinese enterprises which is in the profitable and flat state only accounts for30%after overseas mergers and acquisitions.Faced with this situation, we can not help but start thinking:what is the cause of overseas mergers and acquisitions is much higher than domestic mergers and acquisitions? What are the risks faced by overseas acquisitions exactly? How to control these risks, improve the success rate of overseas mergers and acquisitions?This article is based on the thinking of these issues, so from the following several aspects of research:The first part of introduction mainly elaborates the background and significance of the research, and points out the innovations and the deficiencies.The second part of literature review, discussing the theory of foreign and domestic to overseas mergers and acquisitions research. Specific discussion is from the motivation of overseas acquisitions,the reason for the failure of overseas mergers,the identification and classification of risk of overseas mergers,the risk-control measures of overseas mergers and so on.The third part is an overview of overseas acquisitions. First, this paper expounds the basic concept of the merger and acquisition, overseas mergers and acquisitions and the risk of mergers and acquisitions. Secondly, combed the theoretical foundation of overseas mergers and acquisitions:economies of scale theory, transaction cost theory, efficiency theory, agency theory, the theory of risk management. Again, analyzes the motivations of overseas mergers and acquisitions, as a result of the m&a motivation can affect the risk of mergers and acquisitions, so this paper discusses the content of this section. Finally, through statistical data at home and abroad, evaluated the development and present situation of overseas mergers and acquisitions in China.The fourth part is the main part of the article, using the method of process analysis, analyzed the risk of mergers and acquisitions, which will be faced by overseas mergers and acquisitions, including the three stages:the preparations for the implementation, the implement of mergers and acquisitions and the integration of mergers and acquisitions.The fifth part is case analysis, this paper selects China’s overseas M&A financial history of a typical case of failure-China Ping An Group’s acquisition of Fortis’s Belgian cases to process analysis, analysis the risk of m&a faced by Ping An at the different stages of the acquisition of Fortis.The sixth part is conclusion part, through theoretical discussion and case analysis of the first few chapters summarize Chinese enterprises in overseas mergers and acquisitions of specific measures to control the process of merger and acquisition risks.In this paper, in reference to the results of previous studies, Combined with my own analysis and summary, the main contributions are as follows:The article analyzes the overseas M&A from the preparation to the implementation of mergers and acquisitions,integrates the acquisition risk of the three phases by using process analysis, while using the case study method to analyze the biggest overseas investment case with the huge loss of Chinese the financial history that Ping An Group’s investment to the Belgian Fortis. Drawn to the following conclusions:Corporate mergers and acquisitions risks faced by overseas acquisitions include:the risk of pre-merger decisions,the financial risks during mergers and acquisitions process and the integration risks after the acquisition is completed. The so-called risk of decisions, mainly refers to the risk of select acquisition targets. When conducting the selection of acquisition target, the first,meet the long-term development goals of the enterprise,analysis the business model of acquisition targets, trends are consistent with the long-term business goals.The contents of the financial risks of mergers and acquisitions are complex, including valuation risk, payment risk and financing risk of mergers and acquisitions.the integration risks of Post-merger include cultural integration, human integration, operational integration. To control these risks, it should start from the intergation of option of target company, selecting the payment method of financing, and other aspects of human culture.Due to my limited knowledge and research capabilities, the paper also has the following disadvantages:when analyze the risk of overseas mergers and acquisitions, only analyzed theoretically from a qualitative point of possible risks. Empirical research is not enough, did not use a large amount of sample data to support the view and the statement not creative an innovative models for overseas acquisitions to quantitative analysis, which is a major deficiency of the article. In a later risk analysis of overseas acquisitions, if you can build a system of risk assessment to quantify the risks of overseas mergers and acquisitions, that will be an important research direction. |
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