1、1The Rule of Law and Acquisitions and Risk Prevention in the Process of Cross-border MergersAbstract. With the deepening of economic globalization and Chinas reform and opening up, many outstanding enterprises in China to own a certain amount of funds available to invest overseas acquisitions, hopes
2、 to get their own competitiveness improvement through overseas acquisitions. Cross-border mergers and acquisitions is the capital operation of a high-risk activities, enterprises will face risks in various areas such as decision-making, finance, information, law. Circumvention of legal risks is the
3、key to the success of cross-border mergers and acquisitions of enterprises. The author analyzes an overview of the legal risks in cross-border mergers and acquisitions of Chinese enterprises, the characteristics and performance of the way, and thus how to avoid risks from the external environment an
4、d internal strategic countermeasures. Key words: cross-border mergers and acquisitions; legal; risk; globalization Introductions Along with the deepening of economic globalization and 2Chinas reform and opening up, Chinas largest manufacturing industry, the energy industry as well as part of the IT
5、industry, has completed the initial division of the domestic market share, at the same time, many companies also benefit in the process of economic development over the past three decades increasingly aware of the endless price war just by the domestic market and export cheap “Made in China“ has bee
6、n impossible to make deeper development. Yearning for the overseas market leader in many companies, and response of “going out“ policy, foreign direct investment, existing a certain amount of money into overseas acquisitions and hopes outstanding enterprises through mergers and acquisitions abroad t
7、o obtain the enhancement of core competencies including technology research and development, management strategies, branding, and market awareness. Cross-border M acquisition is a business to buy stocks, shares or assets to obtain control of another enterprise rights or the right to operate the othe
8、r companies still subsisting; cross-border mergers and acquisitions (Transnational M followed by Lenovo to spend $ 1.75 billion acquisition of IBMs personal computer division; the redundant L, in less than a years time the French household name enterprise Thomson and Alcatel owns human arms, and so
9、on. Time much international media attention fully shows the determination and courage of the Chinese enterprises to expand overseas. 3.The establishment of cross-border M On the other hand, it is likely to hinder effective competition caused by the monopoly, resulting in insider trading, market mani
10、pulation and fraud, endangering weak shareholder interests. Therefore, countries, based on the consideration of the domestic market order, sound economic development and national economic security, are by law on foreign mergers and acquisitions of listed companies were regulated. Trying to find a ba
11、lance between “laissez-faire“ and “limit“ make such acquisitions better serve economic development of the country. Of national control laws of the cross-border mergers and acquisitions of listed companies, according to the dominant position, as well as inter-7relationship can be divided into two cat
12、egories: one is the relationship between the legal rights and obligations between the parties in the process of adjustment transactions, such as securities law, corporate law, belong to the people areas of business law; Another type is the nature of public law legal review of whether the cross-borde
13、r mergers and acquisitions generally in line with national and public interests, such as the anti-monopoly law, foreign investment law, the foreign Exchange Management Act, tax law. Equity acquisitions, mainly due to cross-border mergers and acquisitions of listed companies through a tender offer or
14、 the stock market the way of a public tender offer for the listed companies in terms of cross-border acquisitions in the core of the Securities Act, the Foreign Investment Law, Antitrust Law, Corporate Law and other auxiliary other legal environment. 3.2 Legal measures in the context of cross-border
15、 mergers and acquisitions The market economy is the economy of the rule of law, cross-border mergers and acquisitions is based on market-oriented economic behavior, can not be separated from mature, sound legal system. The legal system of cross-border M & A activity mainly consists of two parts: the
16、 domestic legal norms 8and international legal norms. International legal norms, including bilateral treaties, multilateral treaties and international practice, these norms of international investment and international economic development plays an important role. However, despite the economic globa
17、lization is developing rapidly in recent years, the law regulating foreign direct investment is still mainly domestic law, not international treaties. The establishment of the legal system of cross-border mergers and acquisitions, directly depends on the anti-monopoly law, cross-border M & A Review
18、Act, the Securities and Exchange Act, the Companies Act, the Social Security Act, bankruptcy law and other laws and regulations to improve and perfect. In addition to the major mergers and acquisitions law, the developed countries on mergers and acquisitions law established a strict standard securit
19、y system. It includes: ordering property rights trading market, legal assessment and management of assets, rationalization program of mergers and acquisitions, a sound financial system and the internationalization of financial markets. 3.3 Acts of cross-border mergers and acquisitions in the organiz
20、ation and management of the legal relationship Forms and many different types of cross-border mergers and 9acquisitions, is also more complicated. The essence of cross-border mergers and acquisitions by foreign investors is to set up or change the establishment of foreign-invested enterprises by way
21、 of mergers and acquisitions in China. Therefore, cross-border M & A activity is bound to reflect its legal property of the companys organization and production and operation management in accordance with the law. As mentioned earlier, we are mainly divided into an equity cross-border mergers and ac
22、quisitions and asset Type II mode. However, regardless of the mode of mergers and acquisitions, cross-border mergers and acquisitions ultimately without exception, have set up a target company, and is organized by the host countrys Foreign Investment Law, or economic entity with or without legal per
23、sonality or economic organizations. Cross-border mergers and acquisitions in the traditional sense, is the enterprise of one country for some purpose, through certain channels and means of payment, made part of the enterprise of another State, or all of the shares or assets, which latter operation a
24、nd management of the implementation of the actual or completely the behavior of the control. The starting point of the concept is that the acquiring party and the acquiring party (the so-called target company) belong to 10two different countries or regions, and mergers and acquisitions the party acr
25、oss borders, in other countries outside of the State of the M & A side (that is, the acquirer State) engaged in investment behavior. This view is examined whether factors “across borders“ is the main body of the M & A activity. It has taken the identity of foreign nationals in the traditional intern
26、ational investment law as a criterion to define the international investment that measure as the nationality or residence of the natural person, legal person or unincorporated entity investors. As long as the investor has different from investment in the host country of nationality or legal residenc
27、e in a country other than the host country, the investors investment shall be deemed to international investment. The use of this standard to judge a merger and acquisition activities are transnational in nature, its biggest advantage is that it can operate as long as the proof of the nationality or
28、 domicile of the acquiring party and the M & A side, the mergers and acquisitions that can determine whether it is cross-border mergers and acquisitions. For the host country, as long as the acquirer does not have its own nationality or domicile that can be included in the ranks of foreign investors, which decided to give it what kind of
