Discussion On Risk Control Of Enterprises Transnational Mergers And Acquisitions

With the continuous acceleration of the global integration process,the cross-border mergers and acquisitions(M&A)of enterprises has become the main mode of foreign direct investment.After China's entry into the WTO,domestic enterprises constantly accelerated the pace of "going out" by cross-border M&A and the financial crisis also provided a good opportunity for enterprise cross-border merger and acquisition,as overseas M&A in our country under the world financial crisis of 2005 reached a climax.Looking through the cross-border M&A cases of Chinese enterprises,there were many irrational M&A problems,and there was no effective control over all sorts of the hidden risks in the process of mergers and acquisitions.How to make these companies rapidly improve their capacity of mergers and acquisitions base on their development and their own characteristics to effectively complete pre-acquisition targets,which are problems that need domestic scholars to consider and solve.The urgent need for rapid growth,the continuous reduction of non-renewable resources and the fierce market competition are the serious situation of the world economic entities.It is an inevitable trend for companies engaged in energy business to access to more mineral resources in the world by means of overseas mergers and acquisitions.Take China National Offshore Oil Limited Corporation ‘s mergers and acquisitions of Canadian Nexen company as an example to discusses the enterprise cross-border merger and acquisition risk control,is considering China's economic dependence on import keeps in high degree,in particular,resources industry's overseas M&A is representative,at the same time as China's oil industry the most biggest mergers and acquisitions it will provide reference about cross-border M&A activities for other industrial enterprises in the future.In this paper,the text consists of five parts,they are the introduced part,risk control theory of enterprise cross-border mergers and acquisitions,case description of the CNOOC Limited merged Canadian Nexen,case study of the risk control over CNOOC Limited's acquisition of Nexen,enlightenment for the risk control of CNOOC's acquisition of Nexen respectively.The first part is aim to explicit the meaning of the analyze and fundamental meaning of cross-border mergers and acquisitions' risk control as well as summarized the research status of scholars at home and abroad.The second part first introduced the related content of cross-border M&A risk,and then summarized the concept of the enterprise cross-border merger and acquisition risk control and control methods,finally expounded the M&A theory,control theory,the risk management theory and theory of M&A risk control.The third part introduced the basic information of CNOOC Limited and Nexen,motivations and process of CNOOC Limited‘s acquisition of Nexen,and expounded the characteristics of CNOOC Limited's acquisition of Nexen and summarized all kinds of risks existed before,in and after the M&A.The fourth part was in-depth analysis of the case of CNOOC Limited merged Nexen and has analyzed the risk control of acquisition early environmental risk and financial risk,the risk control of the pricing risk,the financing risk and payment risk in the process of merger and acquisition and acquisitions' late risk control of financial system integration risk,debt risk,resource integration,cultural and human integration risk.Finally,through the theoretical study of cross-border M&A risk and the combination of the disadvantages of the CNOOC Limited's case study,the fifth part summarized enlightenment of the CNOOC Limited's success cross-border merger and acquisition,and combined the case to put forward feasible risk prevention measures,so that Chinese enterprises can effectively control the hidden risks in overseas M&A,maximize the enterprise value.The main contribution of this paper is making example analysis of risk faced in the whole stage of M&A through the combination of theory and case study and put forward some targeted risk prevention measures,hoping that this case study analysis can help Chinese enterprises to take reasonable measures to make risk control in future cross-border M&A and boost the success rate of Chinese enterprises cross-border mergers and acquisitions.