The Influence Of Financial Risk Control On The Value Creation Of Cross-border M&A

At present,the cross-border mergers and acquisitions business of Chinese enterprises is becoming more and more frequent,and the merger and acquisition of financial risks in the process of cross-border mergers and acquisitions is directly related to whether the expected value can be achieved after the merger and acquisition.However,many companies still face problems such as unreasonable value appraisal of target companies and obstacles in financing and payment in the process of cross-border mergers and acquisitions,which leads to the destruction of value after cross-border mergers and acquisitions.Therefore,studying the financial risk management in cross-border mergers and acquisitions is of great significance to improve the success rate of cross-border mergers and acquisitions by Chinese companies and enhance corporate value through cross-border mergers and acquisitions.However,there is a lack of research on the entire process of corporate financial risk management of cross-border mergers and acquisitions,and there is no case study to research the impact and process of financial risk management on cross-border M&A value creation.Therefore,this paper uses the case study method to study the financial risks and financial risks management of Group M's cross-border mergers and acquisitions of Company K.Using accumulated excess returns and financial analysis,it has found that the value of Group M has been improved after the M&A.Based on this result,this paper deems that the management and control of financial risks contributes to the value creation of cross-border mergers and acquisitions.Finally,with the help of risk management theory and dynamic capability theory,this paper analyzes the impact and process of financial risk management on cross-border M&A value creation.The main conclusion of this paper are as follows.First,the management and control of financial risks runs through the entire process of cross-border mergers and acquisitions.Driven by strategies and goals,financial risk management contributes to the value creation of cross-border mergers and acquisitions by reducing and eliminating the negative effects of uncertainties and financial risks in cross-border mergers and acquisitions.Accordingly,the market has formed a positive expectation and the company realizes the value creation after cross-border mergers and acquisitions.Second,in the early stages of cross-border mergers and acquisitions,the management and control of valuation risk helps to form a reasonable merger premium.The reasonable merger premium is conducive to the subsequent financing and payment risk management and financial integration risk management,which will help reduce debt pressure and promote the improvement of financial performance after mergers and acquisitions.Third,in the mid-term of cross-border mergers and acquisitions,the control of financing and payment risks will facilitate the progress of cross-border mergers and acquisitions in transactions,thereby alleviating pressure of financing and payments.Fourth,in the last stage of cross-border mergers and acquisitions,the control of financial integration risks contributes to post-merger integration,which reduces the potential adverse effects caused by integration and contributes to the financial performance improvement.The main innovations of this paper are as follows:based on an actual case,the comprehensive study is conducted on the financial risks control in M&A and the research on the management and control of financial risks in cross-border mergers and acquisitions is further extended;based on risk management theory and dynamic capability theory,the impact of financial risk management on cross-border M&A value creation is studied.Therefore,the research in this paper has certain reference value for Chinese companies to control financial risk in cross-border mergers and acquisitions.