A Research On Financial Problems Of Chinese Enterprises' Cross-border M&A

Since Chinese joined WTO,China starts from a closed economy to open economy,along with the development of “The Belt and Road ",China's enterprises are no longer limited to local investment,but look at the global investment.The global merger and acquisition activity has been warming up,and Chinese enterprises have become the active subject in the wave of global merger and acquisition.According to China Investment Corporation' s investment statistics,2016 Chinese enterprises completed 545 overseas mergers and acquisitions cases,and the total amount of the transaction is approximately 209.5 billion dollars.The growth in the number of transactions is 100%,showing an explosive growth trend.But the success rate is less than 40%.A large number of failure cases are caused by the failure of financing decisions.It can be seen from this that the financing activities in the M & A of transnational enterprises are the most important part of the M & A activities.Financing activities is affected by many factors,such as capital structure,enterprise basic cost,market financial status.Therefore,the choice of financing decisions requires the company to weigh and analyze the internal and external conditions.and make professional analysis and judgement.Considering the advantages and disadvantages of various financing methods,enterprises can match the reasonable financing way.This paper first introduces the current situation of cross-border M&A in China,which shows explosive growth but high failure rate.On the basis of the related theories of cross-border M&A financing,we choose the representative cases in the transnational M&A of Chinese Enterprises,Shuanghui merging Smithfield,and analyze the background of the M&A.At the same time,points out the existent problems in the financing of cross-border M&A including the singleness of payment,the narrowness of financing channels,the unclosed relationship between banks and enterprises in financing and the insufficient understanding of financing risks.Then analyzes the fund demand,mode of payment,financing decisions,financing risks and evaluation of financing effects of the whole process of M&A.Finally,this paper summarizes the successful experience and deficiencies of financing activities in Shuanghui merging Smithfield,and provides feasible suggestions for Chinese enterprises' cross-border M&A financing activities.And puts forward the prospect of our government's support for cross-border M&A financing policy.