| Since the1990s, the trend of international economic globalization and the interpenetration of national economies have been strengthened. With the interpenetration of national economies, more and more companies embarked on the development of international road. The multinational corporation is becoming the subject of world economic integration and is a leading driving force of international investment. In order to implement the country’s "going out" strategy, Chinese enterprises have begun to go abroad, participating in the proactive overseas M&A activities and Resource-based enterprises is the vital member of them. In recent years, in order to ease the contradiction between supply and demand of domestic resources and enhance international influence and competitiveness, more and more resource-based enterprises aim at investing overseas and begin a series of overseas M&A activities. Over the past10years, oil and gas and mining sectors has accounted for more than half of the share in the Chinese overseas M&A transactions. In February2013, CNOOC spend＄15.1billion to acquire Nixon in Canada, becoming the largest overseas merger in China by so far.However, because of the complexity and uncertainty of overseas M&A, overseas M&A is permeated by finance risk. There are many obstacles on the road of the M&A overseas of resource-based enterprises in our country and there are many failures in the process of our resource-based enterprises overseas M&A. For example, CNOOC failed to acquire Unocal under the obstruction of the U.S. Congress in2005and Chalco failed to acquire the Rio Tinto. So it is necessary to have a full aware of finance risk and control it effectively. Various risk factors in M&A will eventually be reflected in financial, from this perspective, the financial risk is the ultimate manifestation of all types of risk and is a comprehensive risk. Overseas M&A includes pricing, financing, payment and integration four stages, so finance risk is mainly reflected in the process of pricing, financing, paying and integration. There are called pricing risk, financing risk, paying risk and integration risk. From the macro perspective, political and legal factors lead to finance risk and from the micro perspective, finance risk is from the process of pricing, financing, paying and integration. It is necessary to have a full aware of finance risk and control it effectively in order to enhance the success rate and maximize the interest of resource-based enterprise. This paper is aimed to identify the finance risk in the process of M&A activity including pricing, financing, paying and integration of resource-based enterprise and propose measures to control risks. In the process of resource-based enterprises overseas M&A, how to identify pricing risk, financing risk, paying risk and integration risk and have a effective control of it is related to the interest of resource-based enterprises and weather the "going out" strategy can be effectively implemented and it is the significance of this study. This essay intends to be discussed in the following four aspects.The first chapter is mainly to introduce the overview of the theory of the control of the finance risk in the activity of resource-based enterprises overseas M&A. Including the concept and motivation of resource-based enterprises overseas M&A, concepts and features of resource-based enterprises overseas mergers and the theory of the control of the finance risk in the activity of resource-based enterprises overseas M&A. The motivations of resource-based enterprises overseas M&A are acquiring scarce resources, to protect national resource security and to bail out the industry chain. There are multiple characters in the finance risk of resource-based enterprises overseas M&A, including uncertainty, objectivity, dynamic, etc. So it is hard to have a good control of it. Economies of scale theory, industrial organization theory and dynamic risk control theory provide a theoretical basis.The second chapter summarizes the current situation of China’s resource-based enterprises overseas M&A and financial risks exist. Today, the scale of the resource-based enterprises overseas M&A is becoming lager and lager and aimed at rich resource. Most of the mergers are state-owned enterprises and are horizontal mergers and pay in cash. This part elaborates finance risk mainly from pricing risk, financing risk, paying risk and integration risk four parts.The third chapter analysis the reason of the risk occurs from China’s resource-based enterprises overseas M&A. The reason analysis includes macro and micro two levels. Macro reasons include political reasons and legal reasons. Micro reason analysis is from the stage which finance generate, including reasons of pricing risk, reasons of financing risk, reasons of paying risk and reasons of integration risk.The fourth chapter proposes specific measures to control the finance risk mentioned in the third part. The proposes are also from macro level and micro level. The macro reasons include reduce political obstruction and reduce legal disputes, etc. Include strengthening government relations, learning foreign country’s M&A experience, fulfilling social responsibilities according to law, etc. Micro-level measures include doing due diligence, choosing proper assessment methods, arranging financing structure scientifically, broadening the payment methods, having a good cultural integration, establishing the financial integration process and other countermeasures. |
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