Cultural Risk Research on Overseas Merger and Acquisition of Chinese Petroleum Enterprise

Abstract

Cultural risk is one of the major risks of Chinese oil companies’ overseas merger and acquisition. The root cause of cultural risk lies in cultural differences. Differences in the political factors, laws and regulations, religions, business environment, business rules, and corporate culture of host countries will inevitably lead to the emergence of ethnic cultural risks, commercial cultural risks, and corporate culture during overseas merger and acquisition. Due to the different characteristics of state-owned oil companies and private oil companies, the main types of cultural risks faced in overseas mergers and acquisitions are also different. “Western model”, “Central Asian model” and “Middle East model” are the most common overseas merger and acquisition models of oil companies. Using SWOT risk analysis method, the impact of various cultural risks and the appropriate strategies can be analyzed and developed. The degree of cultural risk in different modes can be assessed to provide reliable strategies or overseas merger and acquisition of oil companies based on the analytic hierarchy process (AHP).