Research On Cross-border M&A Financing

Since the 21 st century, the rapid development of world economy and globalization drive the cross-border M&A activities into a booming period and enterprises in our country have gradually become the new role of the cross-border M&A stage. Recently there is a rapid growth of the modern enterprise mergers and acquisitions, while in the process of mergers and acquisitions a large number of transactions about transferring assets are involved. Such a complicated and huge engineering is unable to complete without strong financial support. Therefore, financing is the very key factor in mergers and acquisitions; it is an important bottleneck of the merger and acquisition activities. Choosing the best from a host of financing ways is a very significant issue to every enterprise. While enterprises in our country have gained more and more experience about merger and acquisition activities, their behavior in the selection and use of financing is also in constant development and innovation. Due to the immature capital market and late starting point of merger and acquisition activities.etc, there is a large gap between our country and other western countries in the respect of Cross-border M&A financing. The problems about cross-border M&A financing in China remain to be solved.This article is divided into five parts. In the introduction, the paper introduced the research’s background, significance and methods. After reading a large number of literature the writer finds that most studies about cross-border M&A financing by empirical and direct analysis and there are only few case studies. Suggestions for the financing problem is mostly focused on macroscopic aspects such as perfecting the relevant laws and regulations and developing capital market. Cross-border M&A financing mainly involves three aspects: Payment methods, financing methods and financing risk. Therefore, these aspects are introduced respectively in the second chapter and then expound the internal and external factors that influence the M&A financing decision. The above analysis lays the theoretical foundation for the following research. Then, make a analysis on the current situation and problems of the cross-border M&A financing of our country. The main conclusions in this part are as follows: Cross-border M&A in our country is developing rapidly; the diversity of cross-border M&A payment and financing; more complicated financing structure. But it is worth noting that there are some existing problems about cross-border M&A in our country. Single way of the payment;limited financing ways;the low dependency between enterprises and banks and insufficient financing risk prevention are all involved in these problems. Cross-border M&A financing problems in our country are still very serious in a short time. On the basis of above analysis, make a in-depth analysis of the financing program which adopted by Guangming when it merges Weetabix.The author thinks that the financing options reduces the cost of financing and improves the financing efficiency in short term presents the characteristics of internationalization. But the financing project also exists the following problems: The single financing ways;the unreasonable financing structure and the simplistic decision-making factors M&A financing. Finally, according to the analysis of the situation and the problem put forward the proposal from the perspective of enterprise. Companies can make full use of internal and external capital market to broaden the financing channels and can also use mixed financing tools and innovative financial tools to promote cross-border M&A financing diversification.