Research On Risk Measurement Of Cross-border Mergers And Acquisitions Of Construction Machinery Enterprises In China

With the improvement of Chinese opening to the outside world,more and more enterprises have participated in cross-border M&A activities.Regardless of the preparatory stage before M&A or the integration stage after M&A,cross-border M&A has gradually become a breakthrough for enterprises to improve their R&D capabilities and expand their market size,but in essence it is a risk-ridden behavior of foreign investment.Under this situation,Chinese construction machinery enterprises have also ushered in the wave of cross-border M&A,and because of the characteristics of cross-border M&A of construction machinery enterprises,it is necessary to study their risks.According to the existing literature,most of them focus on qualitative analysis of risk,but neglect to quantify risk.This paper focuses on the measurement of cross-border M&A risks of construction machinery enterprises.Combining qualitative analysis and quantitative analysis,it introduces the measurement methods and specific applications.In addition,Sanyi is a benchmark enterprise in China and even in the global construction machinery industry.Its M&A of Putzmeister,Germany,has become a classic case in the industry.It is beneficial to systematically study this case.The theory of M&A risk prevention under realization is also conducive to providing countermeasures for cross-border M&A of Chinese construction machinery enterprises to avoid risks.Based on the increasing complexity of M&A risks in construction machinery industry,this paper draws the characteristics of M&A risks from the development status of construction machinery industry and the status quo of cross-border M&A risks,introduces relevant theories,and summarizes the related methods of risk identification and measurement in enterprise M&A.The main methods of risk identification are Delphi method,piecewise identification method and risk tree identification method,etc.The measurement methods are mainly divided into analytic hierarchy process,fuzzy comprehensive evaluation method,HHM-RFRM method,etc.Then,taking Sany Heavy Industries’ M&A of Putzmeister,Germany as an example,this paper makes a qualitative analysis of its risks,uses the analytic hierarchy process and the fuzzy comprehensive evaluation method mentioned above to establish the AHP-GRAM model to quantify the risks,and obtains the risk level and key risk of the M&A.In view of this,the article finally puts forward scientific and reasonable risk prevention suggestions from three different stages in order to provide reference for cross-border M&A of construction machinery enterprises in China.In the preparatory stage of M&A,due diligence should be strengthened,relevant decisions should be made well,and product lines with higher synergistic value should be selected.In the stage of M&A transaction,valuation should be strengthened and technology absorption should be improved.At the stage of merger and acquisition integration,we should pay attention to the communication between the two sides,hold a more inclusive attitude towards the target enterprises,and establish an overall risk feedback mechanism in order to achieve the overall success of merger and acquisition.