Analysis On Financing Strategy Of ChemChina Merger And Acquisition Of Syngenta Company

The overseas M&A activity involves two countries,and it needs huge funds as support to complete it.Therefore,financing is extremely important for overseas mergers and acquisitions.The quality and quantity of financing will affect the M&A process and even determine its success.However,China’s capital market started relatively late and its development level is low.As a result,there is still a gap between China and Western developed countries in M&A financing.So,it is of great practical significance to study overseas M&A financing strategies.This article quotes ChemChina’s acquisition of Syngenta as a case to summarize its successful experience.ChemChinal acquireed funds through syndicated loans,issuance of fixed debts and convertible preferred shares,and designed financing structure by building three-tiered entities at home and abroad.It met the requirements of various financing parties and obtainded control over the ultimate executing party.Although the financing design was complex and skillful,there were also deficiencies,such as a single payment method,poor intrinsic financing capacity,heavy debt financing,and restricted financing channels.At the same time,it containsed multiple risks,such as debt repayment risk,financial risk,interest rate and exchange rate risk,and refinancing risk.Therefore,this paper proposes to improve financing from three aspects: loss control,loss prevention,and loss suppression.Based on the analysis in this paper,we have put forward suggestions for the help of Chinese companies in overseas M&A financing,focusing on three aspects of inward financing,foreign financing,and financial innovation.First,we should develop internal capital markets and enhance internal financing capabilities.Second,strengthen foreign financing capacity by strengthening corporate construction,concluding strategic alliances,and participating in international markets.Third,carry out financial innovations.Finally,it is to build a model of “inside financing—exogenous financing—financial innovation”.