With the inclination of national policy and the change of domestic economic environment, all kinds of enterprises gradually shift from industrial construction to capital operation. Of course, it is certainly much faster to make profits by capital than by industry, but why is the failure rate so high and what factors restrict the success rate of overseas mergers and acquisitions?
According to the risks put forward by Zhu, director of American Longmen Capital, combined with other experiences, this paper summarizes several risks that are easily overlooked by everyone.
First of all, the golden cicada sheds its shell. It refers to the acquisition of important resources such as human resources, management team, customer contracts and technical patents that are difficult to reflect in financial data, so that the acquisition company can only buy an empty shell.
Therefore, in the M&A contract, the acquirer can require the target company to ensure that it will not dispose of any assets of the company or engage in any behavior that may affect the company's operation during the period from the start of due diligence to the signing of the M&A contract, otherwise it can make compensation according to the amount agreed by both parties.
Second, the winner curse and synergy trap. In the bidding process, the acquirer is likely to buy at a price higher than the actual price because of overestimating the market or irrationally bidding with the opponent. As a result, market integration failed to meet expectations and even failed.
In order to avoid this kind of risk, the company should plan the combined task list when merging, which should include the situation of operation, accounting, marketing, human resources and other departments. The task list is pushed forward by time and refined to the main events of the department.
Third, indulging in the past, some enterprises only see the glorious past of big brands in overseas mergers and acquisitions, but ignore the evaluation of their future development potential.
In fact, the problem faced by the company's management is similar to the "winner's curse", that is, how to calmly make a forward-looking comparison between the cost of mergers and acquisitions and the benefits that the company can obtain after the completion of mergers and acquisitions. In operation, any rational decision needs to be based on detailed and reliable due diligence and management's judgment on market and industry trends.
Four. Reply from local government departments. For many large foreign enterprises, state-owned enterprises, listed enterprises, manufacturing enterprises, resource enterprises and so on. We can't accept money. Generally speaking, it needs the approval of China and foreign governments.
According to different projects, enterprises, countries and regions in China, it needs the approval of the National Development and Reform Commission and the Ministry of Commerce, state-owned enterprises need SASAC, and listed companies need the approval of the CSRC.
From the perspective of foreign governments, we must first clarify the examination and approval institutions. According to the nature, scale and laws involved in the transaction, anti-monopoly, national security and the approval of the competent authorities of the industry should generally be considered. For example, the Committee on Foreign Investment (CFIUS) in the United States is the most destructive department in cross-border M&A between China and the United States. It can prevent the completion of the acquisition project on the grounds of obstructing national security and controlling national commerce.
5. Report the trap. Financial statements are the primary source of information and the basis of value judgment in the process of enterprise merger and acquisition, but they can't fully disclose all major information. If the acquirer fails to pay enough attention to some major issues in time, it will directly affect the development of M&A, increase the cost of M&A, and even lead to financial and legal disputes, M&A financing arrangement and integration process.
If you can give detailed information, you can give a more detailed answer.