Risk Management Strategies Of Overseas M&A Of Private Enterprises

With economic globalization and rapid development of economy of China,private enterprises initiated overseas M&A one after another frequently from 2013 to 2016.But unfortunately,most of those M&A cases were unsatisfying.However,there are still some successful M&A cases.One of them is “Blue Sail Medical acquisition of Biosensors International” case.Based on the phenomenon above,this article puts forward three questions:1)What kind of synergies of M&A did Blue Sail Medical Co.,Ltd achieve? 2)Which kinds of M&A risks did Blue Sail Medical Co.,Ltd have to face? 3)How did the risk management strategy that Blue Sail Medical Co.,Ltd used deal with the M&A risks?Firstly,this article arranges existing research in risk categories in literature review.Based on chronological order,overseas M&A risks are divided into risks of early stage,intermediate stage,and later stage.In order to explicate key risks,this article combines the features of private enterprise M&A,overseas M&A,and snake-swallow-elephant M&A.In overseas M&A risks,some kinds of risks are highlighted,they are: missing opportunity risk,financing risk,payment risk,cultural integration risk,and employee integration risk.The key risks above constitute the first dimension of analytical framework.Secondly,with risk management theory as the core theoretical basis,the second dimension is risk management tools in risk management theory.Combing the first dimension and the second dimension,the analytical framework is composed by risk category and risk management tool.For the case,the article analyses 4 aspects below: risk taking of missing M&A opportunities,risk aversion of financing and payment risk,risk control of integration risk,and risk compensation of integration risk.Finally,according to the analytical framework above and information available,this article analyses the case in risk taking of missing M&A opportunities,risk aversion of financing and payment risk,risk control of integration risk,and risk compensation of integration risk.The risk management categories are fully analyzed and the conclusion is put forward at the end of this article.The conclusion of this article is: private enterprises can try to establish a community of interests and manage M&A risks by sharing risk and interest with its strategic partners.The contribution of this paper is reflected in two aspects: practical enlightenment and theoretical contribution.In terms of practical enlightenment,under the realistic background of unsatisfying M&A results of private enterprises,this paper uses the successful case of Blue Sail medical risk management to enlighten the overseas M&A of private enterprises.In terms of theoretical contribution,this article takes a multi-property case as research case,and combines the research fields of private enterprise M&A,overseas M&A and snake-swallow-elephant M&A.In addition,the two-dimensional analysis framework proposed in this article makes a contribution to the theoretical analysis method.