Research On Financial Risk Prevention Of Transnational Mergers And Acquisitions In Automobile Industry

With the "The Belt and Road" policy is putting forward,Global economic and trade activities will be closer and more active.Transnational M&A among enterprises in different countries play an important role in the strategic plan of company development.The state’s attitude towards transnational M & A has gradually changed from encouraging to calling for rationality and high efficiency.In 2016,the number of transnational M & A transactions reached more than 520,the transaction amount was $221 billion,in the first half of 2017 the total amount of M & A transactions fell by 13%,but the number of deals has increased by 8%,despite the slight slowdown in cross-border M & A transactions in 2017,but further growth is expected in 2018.The automobile industry is in the stage of rapid development,The purpose of cross-border M&A is clear,which obtain advanced technology,and expand the product market as a supplement.With the government’s strong support for new energy vehicles,more and more enterprises are seeking new energy power technology upgrading,increasing the demand of transnational mergers and acquisitions.Transnational M & A have a longer duration of activities,companies are always faced with risks throughout the process,enterprises are often unable to assess the overall risk and respond the risk in time,choosing the wrong means of dispersing risk,which the success rate of transnational M & A is not high,ultimately affected the operation of the enterprise itself.Therefore,the most important thing that enterprises need to pay attention to in the process of cross-border M & A is the prevention of risks.This article mainly uses the case analysis research method,analyzes the financial risk and the precaution measure in the process of Geely M&A Volvo,combined with the case and the current situation of transnational M&A to improve the financial risk prevention measures of automobile industry transnational mergers and acquisitions.First of all,based on the whole process of cross-border M&A,this paper analyzed the financial risks of the transnational mergers and acquisitions in the automobile industry,The financial risk of transnational mergers and acquisitions is divided into value assessment risk,financing risk,exchange rate risk and integration risk,also analyzed the transnational M&A of China’s automobile industry and the current situation of its financial risk prevention.Secondly,by using the method of case analysis,analyzes the financial risks and corresponding risk control methods of Geely group in the process of M&A,and evaluates the risk control methods of Geely Group.Finally,based on the current situation of transnational M&A and M&A preventive measures,this paper puts forward some suggestions on improving transnational merger risk control.In the process of transnational M&A.The subject of M&A should combine the absolute valuation and relative valuation method to accurately estimate the target enterprise from the perspective of the industry.Choosing private equity method to carry out equity financing,set up M&A fund to reduce debt financing ratio,reduce later debt service risk,seeking relative safe financing structure.To hedge the exchange rate risk in the M&A process by buying foreign exchange futures.The establishment of financial sharing system to spread the integration risk of cross-border mergers and acquisitions.