Analysis Of Financing Of Chinese Private Enterprises’ Cross-border M&A

Under the background of the economic policy in our country is becoming more and more relaxed,different economic subject grow gradually in our country. Private enterprises in various fields has achieved outstanding results.Economic statistics of recent years also shows that private enterprises has become the key impetus to economic development in our country.The healthy development of private enterprises is very important for the long-term sustainable development of our economy. And if private enterprises wants long-term development,going abroad is the inevitable choice.It is not hard to find that today’s large and medium-sized private enterprises in China are using the opportunities of The Times,and actively cross-border mergers and acquisitions in order to get foreign enterprise resources such as technology and market.Of course, cross-border mergers and acquisitions of private enterprises is not plain sailing.In this process,the problems private enterprises need to face are much larger than that in the domestic implementation of mergers and acquisitions, among them,the financing problem is the key. To a large extent, success or failure of financing determines the success or failure of mergers and acquisitions of other private enterprises. In addition, cross-border mergers and acquisitions usually involve large sums of money, it’s difficult to meet just by relying on the accumulation of private enterprises. Therefore, financing is the inevitable choice. But the problems of financing which private enterprises meeted in the cross-border m&a are always more diffcult than those large and medium-sized state-owned enterprises in our country meeted. The threshold of financing which our country’s private enterprises meeted in cross-border mergers and acquisitions is always much higher than those state-owned enterprises meeted, and their financing channel and available tools are more limited. What’s more, their financing environment is always not ideal. And being lack of necessary policy support and excellent auxiliary agents are also needed to be solved.This means that research of private enterprises’cross-border mergers and acquisitions is necessary.We know the earliest cross-border mergers and acquisitions were usually implemented by large and medium-sized state-owned enterprises, so most Chinese scholars are like to study the cross-border m&a of state-owned enterprises. However, with the growth of private enterprises in our country, on the implementation of the number of cross-border m&a cases, private enterprises have occupied the dominant position. So it is necessary to research our country private enterprise’s cross-border m&a, and the research of cross-border m&a financing problem is more practical significance.This article adopts the method of normative research, and in the base of MM theory, trade-off theory and optimal sequence financing theory, combines the finance, economics with management, be summarized and compared from two aspects of theory and practice to do research on cross-border m&a financing problem of private enterprises in our country.This article studies the cross-border m&a financing problem of private enterprises in our country from four parts.The first part is the introduction section. This part introduces the research background and research significance of this article, and the related literature of our country and abroad were summarized. At the end, this article briefly introduces the research idea of this article, research methods and research framework of the whole article.The second part is the concepts and-theoretical basis of cross-border m&a financing, this part introduces the related concept of cross-border megers and acquistions financing, enterprises endogenous and exogenous financing, and the MM theory,and so on as the basic theory of cross-border mergers and acquisitions financing.The third part analyzes the private enterprises cross-border megers and acquistions’ financing present situation and the existing problems.At present, China’s private enterprises’demand of cross-border megers and acquistions financing is growing, financing policies of our country are also eased, private enterprises also begin to actively implement cross-border mergers and acquisitions in different financing ways,but our country’s private enterprises’cross-border megers and acquistions financing still rely on the domestic capital market.In addition,China’s private enterprises in cross-border mergers and acquisitions often face with many other difficult financing obstacles,such as the problems of the financing channel and the limited financing tools, etc.The fourth part further analyzes the private enterpries’cross-border megers and acquistions financing problems,and puts forward the cause of these problems.Firstly,embarking from the internal cause,the cause of those problem including private enterprises’highly concentrated ownership structure,and their enterprise financial system and accounting information disclosures are not standard,etc.In addition,most private enterprises lack of scientific understanding of various financing way,and lack of skilled talents in the international capital market. Secondly, embarking from the external cause,we can find external funding is less involved in private enterprises cross-border megers and acquistions,the use of new financing tool condition is not sufficient and capital market are not perfect in China have brought the private enterprises cross-border megers and acquistions financing difficult problems.The fifth part puts forward some perfecting suggestions for those financing problems which private enterprises’faced.Firstly,the private enterprises of our country need to improve their corporate governance and financial system,standardize the accounting and disclosure.In the implementation of cross-border mergers and acquisitions,private enterprises need to scientific analysis every financing ways’ financing cost and the optimum capital structure.In addition,private enterprises should also actively make full use of domestic and foreign financial market for financing,endeavor to broaden the financing channels.At the same time,our country should vigorously support the development of the intermediary agencies,improve their quality of service,provide necessary funding for private enterprises cross-border mergers and acquisitions intermediary services.Finally,our country should also give more policy support for private enterprises’cross-border megers and acquistions,to create a good environment for them.