The Analysis On Financial Risk In Cross-border Merges And Acquisitions For Chinese Lithium Corporation

In recent years,with the increasing attention to environmental pollution and the continuous progress of science and technology,electrification has gradually become the general trend of the development of the global automobile industry.The rise of downstream consumer demand has made the lithium mining industry a new sunrise industry competing with other countries in the world.According to the global investment trend monitoring report,due to changes in the global macroeconomic situation and financing conditions,cross-border mergers and acquisitions tend to slow down.However,the fundamental driving factors of mergers and acquisitions are still playing a role,and it is expected that the number of mergers and acquisitions in high-tech and strategic emerging industries will show an upward trend in the future.The endogenous growth of China's domestic lithium mineral resources is difficult to meet the development needs of enterprises.Therefore,seeking cross-border mergers and acquisitions has become the first choice for Chinese lithium mineral enterprises to quickly occupy the market and control the upstream resources.Although the number of cross-border mergers and acquisitions is increasing rapidly,most lithium mining enterprises lack the experience of cross-border mergers and acquisitions and are faced with huge financial risks in the M&A process.Thus it can be seen that the financial risk of cross-border mergers and acquisitions of Chinese lithium mining enterprises is worth further study.Based on the above analysis,the author chose Tianqi Lithium as the case of this paper,and took "the management of financial risks of Chinese lithium mining enterprises' cross-border mergers and acquisitions" as the core content to answer the following three research questions :(1)What are the sources of financial risks of Chinese lithium mining enterprises' cross-border mergers and acquisitions?(2)How to identify and evaluate risk factors in China's lithium mining enterprises?(3)How to effectively prevent and control the financial risks of cross-border M&A in China's lithium mining enterprises?This paper firstly sorts out and introduces the cases studied,conducts in-depth analysis and excavation of the cases by using qualitative analysis method,and identifies the financial risks of Tianqi lithium in the series of mergers and acquisitions from the perspectives of valuation and pricing,financing,payment and post-integration.Then,the analytic hierarchy process is used to construct the financial risk evaluation model,and the results of the financial risk distribution of Tianqi lithium are obtained.Finally,based on the analysis results and data,the risk prevention and control measures of Tianqi lithium were analyzed,and the advantages and disadvantages of risk prevention and control were found out,and the enlightenment and Suggestions for risk prevention and control were proposed.This paper draws the following conclusions :(1)the financial risk sources of crossborder mergers and acquisitions of Chinese lithium mining enterprises can be analyzed from four aspects: valuation and pricing,financing,payment,and post-integration.(2)Enterprises can use financial risk assessment model to evaluate risk factors.In this paper,the analytic hierarchy process(AHP)was used to construct the financial risk assessment system for cross-border M&A,and the degree and distribution of risks were analyzed by combining qualitative and quantitative methods.In this case,Tianqi Lithium's combined integration risk and financing risk accounted for a higher proportion of the risk.(3)From the overall prevention and control effect,Tianqi Lithium's acquisition of Talison has a good effect on the prevention and control of financial risks,while the acquisition of SQM has a limited effect.(4)According to the specific performance of Tianqi Lithium in the prevention and control of financial risks,it provides four general inspirations and suggestions for future cross-border mergers and acquisitions of lithium mining enterprises.The innovation of this paper Is as follows :(1)In order to better explore the depth of case study and deepen the understanding of similar events,this paper adopts the single case longitudinal study method.(2)In this paper,the analytic hierarchy process(AHP)and risk comprehensive evaluation model are introduced to analyze and evaluate the risks of cross-border M&A.