Research On China’s Resource-based Enterprises Risk Management Of Overseas M&A

In recent years, with the further development of Chinese economy, more and more Chinese enterprises that involved in the scope of international transnational M&A transactions want to get the strategic resource, brand and sales channels by obtaining foreign scarce raw materials, advanced technology and management experience. Thus, these enterprises can expand the scale and enhance the international competitiveness in a short time. Reviewing the process of Chinese enterprises’ overseas M&A in the past decade, the deal of resources and energy industry is still dominant in overseas mergers and acquisitions. And nearly half of the overseas M&A activities primarily aim to meet the domestic continuously growing demand for energy and natural resources, and then to develop new overseas markets, access technology and seek potential capital gains.In the era of the resource is king, Resource-based overseas M&A is different from the general M&A not only because resource is regional and non renewable but also because resource is often involved in sovereign issue, especially in the current resources lacking society. And resource-based overseas M&A is sensitive for a county. Even normal enterprise behaviors of merger and acquisition are risen up to the scope of national energy and resources security. At the meantime, complex environment, over elaborated procedures, large investment and long pay-back period and other characters exist in the market. Thus those factors determine that overseas mergers and acquisitions in China is engaged in great exist. So if resource-based enterprises in China want to succeed in the future overseas M&A projects, they must accurately recognize the risks in overseas M&A, and take corresponding measures to prevent.On the basis of research background and research significance, this paper uses the method of combining theory with examples, to elaborate the overseas M&A theory and to sum up the current status of resource-based enterprises overseas M&A, And by analyzing the potential risks of M&A, this paper put forward suggestions and prospects for risks combing with the case.