企业跨国并购财务风险中英文对照外文翻译文献.docx
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企业跨国并购财务风险中英文对照外文翻译文献.docx
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中英文对照外文翻译
(文档含英文原文和中文翻译)
FinancialRisksofChineseEnterprises5
Cross-BorderMergersandAcquisitions
Abstract
WithoverallstrengthofChineseenterprisesandnationalgoingoutstrategy,cross-borderM&AsinitiatedbyChineseenterpriseshavebeenbooming.However,comparedwithdevelopedcountries,ChineseenterprisesstartedtheirM&Aslateandlackedexperienceandprofessionals.Asaresult,Chineseenterprisesfacedwithnumerousrisksincross-borderM&As,especiallywiththefinancialrisks.Thispaper,basedontheanalysisofChineseenterprises9cross-borderM&Ascasesinrecentyears,explainedhowthefinancialrisksformedandfinallycameupwithefficaciousprecautionarymeasures.
Keywords:
Chineseenterprise;M&As;Financial;risks
1.OVERVIEWOFFINANCIALRISKSOFCROSS-BORDERM&AS
Financialrisksrefertothereimbursementrisksandchangeofreturnstoshareholderstriggeredbyfinancingdecisionintheprocessofenterprises9cross-bordermergersandacquisitions(abbr.M&As).Enterprisesoftengothroughthreephases—valuation,financing,andpayment—intheprocessofcross-borderM&As.Basedonvaluation,financing,andpayment,decisionsaffectenterprises9assetsstructureandeventheirsolvencyandreturnstotheirshareholders.Inaddition,cross-borderM&Asuseaninternationalcurrencyformostcountries.Changeinexchangeratesaffectscorporateearnings,aswellasshareholders9returns.Therefore,therearefourmaintypesoffinancialrisks:
valuationrisk,financingrisk,paymentrisk,andexchangeraterisk.
2.STATUSOFCHINESEENTERPRISES9CROSS-BORDERM&AS
Combiningwithgoingoutstrategy,Chineseenterprisesupgradetheirstrengthandparticipateinthecontextofeconomicglobalization.Chineseenterprisesbegintogoabroad,mergingandacquiringforeignones.AlthoughChineseenterprises9cross-borderM&Asstartedlate,Chinahasbecometheworld'sfifthcross-borderacquiringpowerin2009.StatusofChineseenterprises9cross-borderM&Asisasfollows:
2.1IncreasesintheNumberandScaleofM&As
Intheyearof2008,Chinesecompaniescompletedonly30casesofcross-borderM&As,costinglessthan$9billion.Intheyearof2013,Chinesecompaniescompleted99cross-borderM&A,amountingto$38.5billion.ThenumberofM&Asdoubled,whilethetotalamountgrewmorethanthreetimes.
2.2LargeState-OwnedEnterprisesasM&AsSubject
Comparedwithprivateenterprises,largestate-ownedenterpriseshavemoretheirowncapital.Itiseasyforthemtogetloansandfinance,soChinesecross-borderM&Asaremostlydonebylargestate-ownedenterprises.OntheSummerDavosForumin2013,Andrew,GlobalChairmanofKPMGInternational,pointedoutthat86%oftheChina'sforeigninvestmentcamefromChina's
state-ownedenterprises.ByfarinChina,thelargestcross-borderM&AswasinitiatedbyChina'sstate-ownedenterprisesCNOOC.OnFebruary27,2013,CNOOCsuccessfullyacquiredNexenCorp.,aCanadiancompany,byspending$15.1billion.
2.3CashastheMainFormofPayment
China9smarketeconomystatushasnotbeenrecognizedbyallcountries,and,toacertainextent,Chineseenterprisesarediscriminatedincross-borderM&As.Inaddition,China'sfinancialmarketisnotperfect.Inordertogaindirectcontroloftheacquiredenterprises,Chineseenterprisesmostlypaybycash.AccordingtoBloomberg,79.4%ofChina'scross-borderM&Asmadetheirpaymentbycash,3.3%bystock,andonly1.18%byothermode.
2.4IncreasedImpactofExchangeRateonM&As
Beforetheyearof2012,thefloatingrangeofRMBagainstU.S.dollarwasonly0.5%.Since2012,China'scentralbankadjustedthefloatingrangeofRMBagainstU.S.dollarto1%,andonMarch15,2014,extendeditto2%.Comparedtothepreviousfixedexchangerate,thechangeofexchangeratesignificantlyincreased,whichmadetheChineseenterprisesbegintoconsidertheimpactofexchangeratechangeonacquisitioncostsintheirM&As.
3.FINANCIALRISKSFACEDWITH
CHINESEENTERPRISESINCROSSBORDERM&ASChineseenterprisesbegantoparticipateincross-borderM&Asactivelyonlyinthepasttenyears.Thelackofexperiencemadeitdifficulttoaccuratelyvaluethetargetenterprises.China'sfinancialmarketisnotmature,itisdifficultforChineseenterprisestofinanceandchoosepaymentmode.Atthesametime,theinternationalfinancialmarketfluctuates,andRMBisnotaninternationalmonetary.Cross-borderM&Asisdonebydollaroreuro,whichbringsriskstoChinesecross-borderM&As.
3.1TheValuationRisk
DeterminationofthetransactionpriceofM&AsisactuallyagameplayingbyinitiatorsandtargetsofM&As.Undernormalcircumstances,theinitiatorscannotfullygrasptheinformationoftargetcorporations,soitisdifficulttoestimateaccurately.Ingeneral,valuationpricewillbehigherthantheactualvalueofthetargetenterprise.Overvaluedpricecausesthemaintypeoffinancialriskfacedwiththecross-borderM&AsperformingbyChineseenterprises.Thisriskisreflectedinaseriesofcases,suchasTCLandThomsonM&A,ChinaInvestmentCorporation'sinvestmentinBlackstoneUSA,acquisitionofUnitedCommercialBank(UCB)byChinaMinshengBank(CMB).
TakethefailureofacquisitionofUCBbyCMBasanexample.AftertheoutbreakofthesubprimecrisisinAmerican,westernbankswereshrinking.TheCMBdecidedtomergetheUCBintheUnitedStates.CMBinjectedfundstoUCBtwicein2008.Afterthefirstinjection,thebank'smarketvalueshrankby70%.CMBdidn'ttakethisasasignofwarning,itinjectedagainafterthat.UntilSeptember,2009,financialinvestorssuddenlyannouncedtheexistencefinancialconcealmentbyUCB,andinNovemberUCBwaspermanentlyclosed.IntheprocessofM&As,CMBovervaluedUCBandeventuallyincreasedtheloss.
Howmuchinformationabouttargetenterprisesthatacquirersgetisvitaltoevaluation.Evenifacquirersgetenoughinformation,itissosubjectivetocalculatetargetenterprises9realvalue.IntheCMBM&Acase,thereexistedbigdifferencebetweensubjectiveevaluationandrealvalueofUCB.Afterthefirstinjectionofcapital,thebiggestmistakeforCMBwasthatittookthedevaluationofUCB'sstockasanopportunityofanothercapitalinjectioninsteadofwarning.
3.2FinancingRisk
FinancingdecisionplaysavitalroleintheM&As.Itisthefoundationofpricingdecisionandalsotheconditionofpaymentdecision.Themajorfinancingchannelsusedbyenterprisesintheircross-borderM&Asaretheirownfunds,stockfinancing,andbankloans.Atpresent,Chineseenterprisesmostlyusetheirownfundsinacquisitions,resultinginincreasingfinancialproblems.
InthecaseofacquisitionofAlcatelbyTCLintheyearof2004,thesignificantadverseeffectonTCLwasduetobadfinancingdecisionsinM&As.In2003TCUsannualprofitwasonlyaboutCNY¥560million,whileAlcater'samountoflossonTVsetsandDVDswasashighas€120.TCLdidnotachieveprofitabilityimmediatelyafterM&As.TCLnotonlywasunabletorepaydebtgeneratedfromacquisitionfinancing,butalsoincreasedthenewdebt.Afterthat,TCUsfinancialriskscontinuedtoexpand.
Financingriskiscomposedoftwoparts,oneistheenvironmentalriskoffinancing,andtheotheristhedebtriskoffinancing.Environmentalriskoffinancingassociateswiththecountry'smacroenvironmentandthematurityofitsfinancialmarkets,thatis,themorecapitalmarketsaredeveloped,thebetterthemacroenvironmentis;themorefinancinginstrumentmaybeused,themoreacquirerscangetfinancingwithlesscost.Debtriskoffinancingisrelatedtothestructureofrepaymentperiod.Although,asawhole,macroeconomicenvironmentiswellinChina,thefinancialmarketsarenotmature,andfurthermore,unreasonablerepaymentstructurewillbringfinancingrisktoacquirers.
3.3PaymentRisk
Paymentdecisionisbasedonvaluationdecisionandfinancingdecision.Atpresenttherearemainlythreekindsofpaymentmode:
cashpayment,equitypayment,andleveragepayment.Chineseenterprisesgenerallyusecashpayment,whichisthemostriskyoneintheircross-borderM&As.Thispaymentmodecaneffectivelyhelpenterprisesobtainthecontroloftargetenterprisessuccessfully,butitincreasesfinancialpressureandthedebtburdenofChineseenterprises,whicheasilyleadsthemtoliquidityriskandfinancialdifficulties.
InthecaseofacquisitionofFortisGroupBelgiumbyPingAnInsurance(Group)CompanyofChina,Ltd,(PingAn),from2007to2008,PingAnboughtFortis'sstocksthreetimesfromsecondarymarkets,accountingfor4.99%ofthetotalshares,becomingthelargestshareholderofFortisGroup.However,by2008November,Fortis'ssharepricefell96%cumulatively,andPingAnsufferedhugelosses.InordertomakecashpaymentinthesecondarymarketstogetFortisshares,PingAnpublishedadditional
itsownsharesandalsoincreaseddebt.AsaresultofthisM&A,PingAn'sfinancialriskwasincreased;theratioofassetsandliabilitieswasashighas88.47%in2008.
China'sfinancialmarketestablishedlate,andisinaprogressivestageofdevelopment.Inimmaturefinancialmarkets,therearelimitedfinancinginstrumentsthatcanbeusedforacquirers.Mostofthecapitalcomesfromacquirers9owncapital,bankloans,orgovernmentgrants.Theuseoftheirowncapitaltakesupalotofcorporateliquidity,weakeningtheabilityofdealingwithemergencieswiththeirliquidcapital.Forbankloans,intheimmaturecapitalmarkets,banksmonopolizecapital,askformonopolizedprofits,andmayhaverent-seekingbehavior.Asaresult,enterprisesgetbankloansonlyafterpayingforlargecost.Governmentgrantsusuallysupportspecifi
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- 企业 跨国 并购 财务 风险 中英文 对照 外文 翻译 文献
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