Mergers And Acquisitions Of Financial Risk Control

There has been a new tide of merger and acquisition (Abbr. M&A) led by transnational corporations and characterized by "union of strong corporations" with the revolution of information technology and economic globalization ever since the 1990s. However, the scene behind this feverish tide is freezing cold. "After considering the cost of financing, many buyers sustained loses in their purchases although the M&A kept prosperous." From 1972 to 1988, only 23% of the 116 largest M&A were valid and 61% failed. Thus, how does the buyer, the main bearer of the crisis, control financial crises in the M&A? The present theory consists of two parts: one is the theory of M&A, and the other enterprise financial theory. The theory of M&A emphasizes the way to maximize the value of enterprises when crises are definite, but neglects the management of financial crises in M&A. The enterprise financial theory emphasizes the process of crisis policy making by one party when crises are indefinite, but pays little attention to the interactive relation of policy-making under the condition of unsymmetrical information.Entitled Control of financial Crises in M&A and focusing on the origin and control of crises in M&A, this dissertation tries to combine the modern enterprise financial theory with indefinite analysis as its theme with the signal game theory with the unsymmetrical information analysis as its theme and to set up a complete theoretical frame of M&A crisis control under the condition of unsymmetrical information. The main ideas of this dissertation are as follows.1) Starting from the marginal conditions of property and invest, this dissertation redefines the financial crises in M&A and points out that the financial crisis in M&A is the comprehensive reflection of various M&A crises on the amount of value, a collection of value crises aroused by financial policy making including price-fixing, funding and payment, and the serious departure of the anticipated price from the real price caused by the alternate effects of the attraction and constraint of crises.2) This dissertation sets up a theoretical frame of dynamic crisis control under the condition of unsymmetrical information. This frame consists of two layers of contents. First, seen from the process of M&A, crisis control must run through all the stages of M&A including the design, implementation and reorganization, especially, the price-fixing, financing and payment during the implementation. Second, seen from the trade policy making, crisis control must be carried out dynamically based on information transmission and the strategy for M&A must be adjusted now and then in accordance with the information from the other party.3) Signal game theory should be introduced into the frame of financial crisis control. The departure in behavior policy making under the condition of unsymmetrical information can be rectified by correcting the probability. The author also points out the importance of "experience" in correcting probability and guarding against crises.4) The author discusses the way and crises of payment in M&A systematically and in detail and puts forward the combined design of the way of payment based on crisis control after analyzing the key points for choice of various ways of payment.5) This dissertation analyzes the origin of crises in various processes and the factors that influence the origin with price-fixing, financing and payment as the clues, and states that the ways and measures of crisis control are of practical significance to M&A.