Identification And Response Of Financial Risks In Transnational M&A

In recent years,the number and scale of M&A of Chinese enterprises has increased significantly.According to recent statistics,there are 383 outbound transnational M&A in China with volume of Y420.2 billion.Chinese enterprises are playing an increasingly important role in the world M&A market.Under the background of international economic integration,Chinese enterprises have developed rapidly in transnational M&A.However,since the developing period of domestic enterprise M&A market is short,Chinese enterprises have limited experience and lack of the awareness of financial risk prevention and early warning,especially in the process of transaction.Thus,the failure rate of M&A stays in a high position.In the process of M&A,the influence of relevant factors on M&A activities can be reflected in the related company's financial information,so these factors can be used to build the financial model for this research.This paper analyses performance changes in overseas M&A based on the data of 96 Chinese listed companies from 2012 to 2014 with the amount of M&A greater than $10 million.Combined with the multivariate Z-Score model of Edward Altman,this paper uses factorial analysis and multiple regression to study the impact of different financial variables on the risk of M&A.What's more,this paper employs case study as an auxiliary research tool.This paper chooses the Midea M&A business real case as the research object,which has strong timeliness and representativeness.Through the financial risks analysis involved in this case,Chinese enterprises could study the possible financial risks in the process of M&A,and whether the risk management measures are appropriate,this case can provide a reference for future researchers and learners.