The Analysis On Financial Risk And Prevention In Transnational Mergers Based On The Case Of Qingdao Haier's Acquisition Of Gea

With the market environment of household electrical appliance industry in China becomes mature,it is inevitable that enterprises aiming at household appliance should attempt to cooperate with international giants in order to enhance brand popularity and market competitiveness.Among them,transnational merger and acquisition(M&A)is one of the most effective methods to achieve this goal.Compared with other forms of international investment,transnational M&A seems much more formidable since facing the different political backgrounds,economic environment,financial norms and operational strategies of different countries.Therefore,if enterprises eager to play a positive joint force,it is essential that the enterprises should attach great importance to all kinds of financial risks in stages of M&A and take effective control measures for these risks.This paper mainly analyzes the valuation of enterprises before transnational M&A,the financing options and payment methods in the process of M&A,as well as the integration plan after M&A based on the case of transnational between Qingdao Haier and GEA.The main contents of this paper are as follows.Firstly,carding the relevant theories and concepts of the financial risk of transnational M&A supports the following case analysis.Secondly,this paper explores the main causes of the four financial risks faced by this case.Thirdly,with analyzing a large amount of financial data,risk control measures in such four aspects,the target selection and valuation methods,financing strategies,means of payment and integration of four aspects of risk control measures are studied in this paper,as well as giving a pertinent evaluation and detailed analysis to the control effect of each measure.Then we can summarize a meaningful financial risk control strategy for China's household electrical appliance enterprises in the process of transnational M&A.The main conclusions of this paper are as follows.Based on the detailed analysis of the case,this paper supposes that Qingdao Haier as a relatively skilled enterprise in transnational M&A has adopted a series of effective measures to control risks for valuation risk,payment risk and post integration risk in the process of M&A.However,it is still debatable whether these measures aiming to controlling financing risk should be adopted.This paper summarizes the risk prevention implications for China's household appliance industry with the analysis and evaluation the effect of risk control measures which are adopted in the process of transnational M&A in this case.