Study On Chinese Companies’ Mergers And Acquisitions Financing Risk

Due to accelerate the process of global integration, China’s growing number of enterprises to expand their scale and improve the international competitiveness and transnational mergers and acquisitions. While participating in cross-border M more and more enterprises, but the success rate of mergers and acquisitions is not high. As the cross-border mergers and acquisitions require a huge amount of money, our business is difficult to mergers and acquisitions by its own funds to meet the demand, therefore, the acquisition financing process is vital. Acquisition financing is a lot of merger and acquisition process will be a part of, has a significant impact on the success or failure of mergers and acquisitions. Therefore, each company should be concerned about how the merger in corporate mergers and acquisitions can obtain sufficient funds, to minimize the risk of financing this problem has some significance for the analysis of cross-border mergers and acquisitions of Chinese enterprises financing risks.This paper is divided into six parts, the first part introduces the background and significance of this paper, an overview of the domestic and foreign scholars on the acquisition financing risks; second part introduces the basic theory of corporate finance cross-border mergers and acquisitions; third part to acquisition financing theoretical risk based, reveals the process of cross-border mergers and acquisitions of Chinese enterprises in the narrow channels of financing, financing single status, a variety of financing risks exist in the process of mergers and acquisitions, including inadequate financing risks, and the cost of capital, payment risks related to capital structure. Section four presents the causes and preventive measures to deal with mergers and acquisitions financing risks, the existence of these risks is mainly due to limitations of national laws and regulations, financing channels for a single, intermediaries play a role in inadequate financing operations are not standardized and other causes. From actively explore the international financing channels, a reasonable choice of financing strategies, choosing the right method of payment, etc. to reduce the risk of acquisition finance, but also to provide a reference for other companies, and thus effectively improve the success rate of mergers and acquisitions. The fifth part Geely acquisition of Volvo as a case study, in-depth analysis of its acquisition financing risk problems encountered in the process, combined with their own situation Geely propose solutions to acquisition financing risk approach. Through this case must come to Geely Automobile multi-channel financing, stability of future cash flows, assets and liabilities, as well as integrated control interest rates and exchange rates do analysis and other ways to circumvent the various financing risks arising from the acquisition process. Part six concludes the paper and made a deficiency of the article.Innovation of this paper is based on the theoretical foundation and the status quo of cross-border mergers and acquisitions corporate financing risk, financing risk Geely acquisition of Volvo’s detailed analysis and propose appropriate solutions.