Frankly speaking, the year 2008 I posted is an extraordinary year for China, and it also coincides with the 30 years of reform and opening up. Recently, the financial tsunami swept the world, which changed the pattern and trend of the world economy and also brought negative effects to China. However, the cold wind of global economy did not blow out the enthusiasm of China M&A market, but made it burn more and more vigorously. The financial crisis from the other side of the ocean has not spared most countries and regions. The financial crisis, also known as the financial storm, refers to the sharp, short-term and super-cycle deterioration of all or most financial indicators (the number of corporate bankruptcies and the number of financial institutions) of a country or several countries and regions. Its characteristic is that people's expectations of the future economy are more pessimistic, the currency of the whole region has depreciated sharply, and the economic aggregate and scale have lost a lot, which has hit economic growth. But the so-called crisis, of course, has both "danger" and "opportunity". Therefore, the international financial crisis is both an opportunity and a challenge to cross-border mergers and acquisitions. We should seize the opportunity, meet the challenge, and strive to make our M&A activities continue to grow and develop in the crisis. Transnational M&A refers to the acquisition and merger activities in which foreign enterprises own more than 65,438+00% shares of the acquired enterprise (UNCTAD, 2000). Since 1990s, cross-border M&A has gradually become the most important investment mode of foreign direct investment (FDI). Cross-border mergers and acquisitions have a far-reaching impact on international capital flows, and also greatly affect the process, structure and trend of international industrial restructuring. 1 data shows that in recent years, with the transfer of global industrial structure, some changes have taken place in foreign direct investment. Foreign capital enters China in the form of merging domestic enterprises, and the share of foreign capital M&A in China is increasing. In 2007, * * * approved the merger and acquisition of domestic enterprises 1264, accounting for 3.34% of the newly approved foreign investment projects in China, and the actually utilized foreign capital was US$ 2.08 billion, accounting for 12.78% of the total actually utilized foreign capital in China, with a year-on-year increase of 46.8%. Energy production, machinery manufacturing, food and consumer goods production, and commercial and financial services have become important areas of foreign mergers and acquisitions. At the same time, the scale of foreign M&A in China is constantly expanding. Since 2000, more than half of single M&A cases of multinational companies in China have exceeded $654.38 billion, and some have exceeded $654.38 billion. Why is cross-border M&A an opportunity in the financial crisis? 1. Cross-border M&A has inherent advantages: (1) rapidly expand the scale of enterprises, optimize the allocation of enterprise resources, and expand product supply; (2) Cross-border M&A is conducive to technological and institutional innovation, further promoting institutional reform and innovation in China and promoting economic restructuring and upgrading; (3) It is beneficial for domestic enterprises to participate in the international division of labor more effectively. After multinational companies transfer their production to China first, China has certain technological advantages compared with other developing countries. 2. At present, the cross-border M&A industries of Chinese enterprises are mainly distributed in manufacturing, business services and mining, and the enterprises that implement cross-border M&A are mainly state-owned resource-based enterprises, large and medium-sized state-owned enterprises and large private enterprises. The first two categories are related to the national economy and people's livelihood and national strategy, so the government has great support and is capable of large-scale cross-border mergers and acquisitions. Most large-scale private enterprises have successfully listed, even listed overseas, which is conducive to obtaining M&A funds from domestic and international financial markets. The manufacturing industry will remain the foundation of China for a long time, and the most effective way to rapidly enhance the strength of China's major manufacturing industries is to conduct in-depth cooperation with leading European and American enterprises. There are many European and American companies in which Chinese enterprises participate, while there are only a handful of China companies in which large European and American companies participate. Now this situation may turn for the better. 3 3. The subprime mortgage crisis is gradually eroding the real economy: on the one hand, it provides China enterprises seeking internationalization and industrial upgrading with unprecedented opportunities to acquire foreign enterprises at low prices; On the other hand, global multinational companies that strive to expand new profit growth points and diversify risks are also showing more and more strong interest in the China market with great potential. All these factors provide a strong impetus for cross-border M&A in China M&A market. 4. Under the financial crisis, cross-border mergers and acquisitions are more conducive to improving the competitiveness of China enterprises in the international market. The core elements of M&A are market domination and monopoly. For the growth of enterprises, it is very slow to rely solely on their own accumulation, and it is necessary to resort to mergers and acquisitions as an exogenous expansion form. Since modern times, there have been five waves of corporate mergers and acquisitions around the world, and each wave of mergers and acquisitions has produced a number of giant companies. It is necessary and entirely possible for China enterprises to rapidly improve their scale and efficiency through mergers and acquisitions. (1) Obtaining strategic resources is the main motivation for large state-owned energy development enterprises in China to transnational M&A.. Cnooc's cross-border mergers and acquisitions have acquired tens of millions of tons of crude oil geological reserves by acquiring part of the equity of Spain's Ripso company in five major oil fields in Indonesia and natural gas projects on the northwest continental shelf of Australia. Cross-border M&A of PetroChina has expanded its overseas oil and gas exploration and production assets by cross-border acquisition of Indonesian oil and gas assets of Dai Wen Energy Group. Therefore, enterprises in China should adjust their development ideas according to the evolution of the financial crisis. (2) Conducive to market expansion and integration. Through M&A, enterprises can quickly gain new market opportunities and reach a critical scale without loading industry capacity, which is the main way to enhance the international competitiveness of China enterprises and gain more profits. In addition, the pursuit of market power and dominant position in monopoly market is also the driving force of M&A.. Multinational companies can increase their market share through horizontal mergers and acquisitions, and increase their control over the international market by virtue of the reduction of competitors; The vertical M&A of multinational corporations can effectively control the activities of competitors by controlling a large number of key raw materials and sales channels, and improve the entry barriers of enterprises in their fields with the help of their brands, so as to quickly enter the host country market and expand the total market share of the original enterprises. (3) "Independent knowledge innovation" is conducive to obtaining effective R&D technology, which is the only way for countries and enterprises to achieve sustainable growth in the future. At present, independent technology is generally limited to independent research and development, which has great uncertainty and long cycle, which may make enterprises lose some strategic time opportunities and thus miss the best market opportunity. In fact, in addition, technology introduction, mergers and acquisitions of other companies to obtain key technologies, and rapid improvement of technology and commercial competitiveness also belong to the category of independent innovation. Compared with self-development to build the core competitiveness of enterprises, transnational M&A has strong timeliness and low cost, especially when some knowledge and resources belong to another enterprise, M&A becomes the only way to gain this advantage. (4) Cross-border M&A can bypass trade barriers, avoid foreign intellectual property protection barriers and quickly enter strategic industries. 5. At this stage, China's relevant policies support enterprises to develop outward. Implementing the "going out" strategy is an important measure in the new stage of opening up to the outside world, encouraging and supporting all kinds of enterprises with comparative advantages to invest abroad, promoting the export of goods and services, and forming a number of powerful multinational enterprises and well-known brands. The supporting measures issued by the government are the key for China enterprises to successfully acquire equity in this "financial crisis". 4 Cross-border M&A may bring some problems to industrial safety: First, domestic enterprises may have insufficient motivation for independent innovation after M&A, and national brands may gradually lose; Second, it is difficult to transfer professional technology and obtain key technologies through market exchange technology; Third, the industrial safety of military industry, national defense and other industries is worthy of attention, especially for industries that have just started, lack competition and are easy to form regional monopoly, and the advantages and disadvantages of mergers and acquisitions should be weighed. Since the advent of the financial turmoil has brought challenges and opportunities to cross-border mergers and acquisitions, how should we do this international transaction well now? (1) Anti-monopoly law should be the main legal basis for regulating foreign mergers and acquisitions and supervising transnational mergers and acquisitions. Anti-monopoly law is the most important legal basis for countries to control the influence of M&A transactions on market competition. China should improve the anti-monopoly law as soon as possible and establish a legal framework to regulate international M&A. (2) In the field of high-tech industries, the government should appropriately restrict the entry of foreign capital, encourage the entry of mergers and acquisitions, and gain greater benefits from the transfer of high-level technology from foreign capital to domestic enterprises. Therefore, in the high-tech field, the realistic method is to cancel the proportion limit of foreign holding and allow foreign holding or even full holding. 5(3) Reduce relevant procedures of cross-border M&A control, and save costs for normal trade activities of M&A enterprises. Our government's approval procedures for cross-border M&A of domestic enterprises are very complicated, time-consuming and laborious, which will delay many M&A opportunities in the current international market turmoil and fleeting opportunities. In this special international period, the relevant government departments can appropriately relax the relevant examination and approval conditions. As long as transnational M&A applications with time requirements, especially those of private enterprises, are legal, they can be released and support private enterprises to seize the opportunity to go out. (4) The purpose of transnational M&A is not only the expansion of production, market and capital, but also the expansion of profits, which objectively has complex value risks. Due to information asymmetry, the acquirer cannot fully understand and analyze the financial and operating conditions of the acquired object in a short time. Therefore, it is necessary to coordinate with foreign governments on the control of cross-border mergers and acquisitions in time, so that the regulatory measures can be effectively coordinated with the regulatory system of cross-border mergers and acquisitions. (5) While setting up its own professional team, we should also use international professional intermediary forces to participate in mergers and acquisitions, including financial, insurance, legal, wealth management, auditing, education and training, public relations companies and other institutions, and make full use of their advantages to fully understand the relevant political and economic situation in the country where the acquirer is located, as well as the relevant information of the target enterprise and its corporate culture, so as to predict and analyze possible problems in mergers and acquisitions, and strive to eliminate obstacles and promote the success of mergers and acquisitions. (6) Broaden financing channels for cross-border M&A enterprises and improve cross-border M&A borrowing capacity; Reduce information asymmetry and reasonably estimate financial risks. Information is the key to the success of a transaction. Financial risks such as financial system mismatch and tax black hole often occur during or after M&A transactions, which are mainly caused by China enterprises' lack of M&A experience and information asymmetry between the two parties. Business investigation is the basis of reasonable estimation of financial risks, especially for some off-balance-sheet financing projects and over-optimistic profit forecast, which is directly related to the financial burden and operational control of enterprises after the completion of mergers and acquisitions. The global economic slowdown triggered by the subprime mortgage crisis will make China's economic development face more challenges in the future. Under the background of financial crisis, the transformation of economic growth mode and the pace of economic restructuring will also be accelerated. For enterprises in China, under the current financial crisis, increasing cross-border mergers and acquisitions as a "going out" strategy has greater advantages than competitors in other countries. Therefore, we should seize the opportunity, meet the challenge, and strive to make our transnational M&A activities continue to grow and develop in the crisis! References: 1, 5 Cross-border M&A and International Capital Flows, Economic Management Press, first edition in June 2005, 1 1, written by Yao Zhanqi, P2 1 1 P2402 International Business Daily 3 China Economic Weekly 4 Financial Star website.