Analysis Of Financial Risks Of Cross-border M&A In Chinese Enterprises

After the 2008 financial crisis,Chinese companies began to involve cross-border mergers and acquisitions.After that,Chinese companies set off a wave of cross-border mergers and acquisitions.In 2016,the scale of mergers and acquisitions reached its peak.After 2016,cross-border mergers and acquisitions experienced a three-year decline.The cross-border M&A of Chinese enterprises is mainly based on high-tech industries such as materials and medical care.Cross-border mergers and acquisitions help Chinese enterprises to obtain advanced production technologies and mature sales chains of foreign high-quality enterprises.If the Chinese M&A companies are well integrated,they can obtain synergies for M&A.The performance brought about by the effect.However,since every step of cross-border M&A is full of uncertainty,the information asymmetry in valuation is often more serious because of the country environment.Other risks such as exchange rate risk,interest rate risk,and integration risk are also due to the policies of both parties.The cultural environment is different and the world political and economic situation has intensified.This article selects the case of Qumei Home's acquisition of Norwegian Ekornes in 2018.Firstly,it has compiled relevant researches on cross-border M&A at home and abroad.The theory defines the connotation of cross-border M&A financial risks.Secondly,it summarizes the current situation and financial risk analysis of cross-border M&As of Chinese companies in 2016.The financial risks in this case are again decomposed into pricing risks.Risks,debt repayment risks,financing risks,exchange rate risks,and integration risks were analyzed separately to evaluate Qumei's measures to control risks.Finally,relevant recommendations were made for financial risk prevention.The conclusions of this paper are as follows:Through the analysis of the case,this paper believes that Qumei Home has adopted more appropriate risk control measures to deal with pricing risks and financing risks;it is still impossible to choose the cash payment method based on the strength of the enterprise.The debt repayment risk management is weak;the integration risk is currently not exposed.Through the analysis and evaluation of various risk management measures and effects,this paper proposes a reasonable risk control strategy.