Research On Risk Control In Financing Of Cross-border Merger And Acquisition

With the development of global integration,mergers and acquisitions activities have played an increasingly important role in the business operations.Since the beginning of 2008,the scale and quantity of Cross-border M&A activities of Chinese companies have been rapidly increasing,but it is undeniable that there is still a big gap in cross-border M&A between Chinese corporations and western developed corporations.Lack of experience in decision-making and management of M&A activities,especially in M&A financing risk management,caused Chinese companies to repeatedly experience setbacks in their actions to go abroad at an early stage.Moreover,it is inadequate in understanding of the procedures and systems of financing internationally.In recent years,the “going out”,“One Belt and One Road” and the needs of Chinese companies' own development have increased the frequency of Cross-border mergers and acquisitions,and corresponding risk of M&A financing brought by lack of experience has become increasingly prominent.The background of state-owned enterprises makes themselves in an active response to calls from government and being the initiative in cross-border mergers and acquisitions.However,the lack of understanding of financing risks and irrational management decisions often appear in mergers and acquisitions activities,in result that solving the problem in financing oversea for state-owned enterprises is necessary right now.This article mainly defines the concept of M&A financing risk based on the research results of domestic and foreign scholars.Through combing the financing risk theory of mergers and acquisitions,it also elaborates the existing Cross-border M&A status of Chinese SOEs and private enterprises,the types of Cross-border M&A financing methods and the characteristics in Cross-border M&A financing,which is the foundation for the follow-up analysis case of Syngenta.In the case analysis,the financing risk of SOE Cross-border M&A is divided into financing structure risk,financing payment risk and policy risk.Meanwhile,qualitative and quantitative risk identification methods have been used to analyze and measure the financing structure risks and financing payment risks.Furthermore,the risks brought about by the policies have been analyzed as well.Finally,according to relevant theories in SOEs Cross-border M&A financing risks,effective management measures and suggestions for improvement will be made for future Cross-border M&A financing of SOEs.