Study On The Several Questions Of Financial Risk In M&A

In recent years, under the depressed influence of international economy, the global M&A trade sinks into the depressing state, and the merger among Chinese enterprises is still frequent, the volume of Chinese enterprise M&A increases at the speed of 70% every year in the past 5 years. However, our country's distinctive environment has put forward all sorts of challenges for M&A. Study according to McKinsey: the success rate of Chinese enterprise M&A is very low , less than 30%. This causes various circles of society to extensively concern on risk in M&A in china. M&A is made up of many kinds of activities, the financial activity is its core. This text attempts to research financial risk in M&A for improving the success rate of M&A in china. For this reason, this text studies through four parts:First part mainly introduces concept ,classification and quantitative model of financial risk in M&A. This is a basic theory of this text. Through research on the concept of financial risk in M&A, a lot of revenant studies have been done for the moment, but there is difference to the understanding of its concept. There are two kinds of views mainly: the view of financial activity risk in M&A and the view of the financing activity risk in M&A. Through the comparison of two kinds of views, the writer think : "Defining financial risk in M&A should combine financing activity essence, risk essence and request for the modern enterprise system, so the first kind of view accords with above- mentioned requests even more than the second kind of view. At the concrete content, should include the investing strategic risk in M&A, value risk of targeted company , financing risk and combining financial affairs risk . In addition, according to the course and system of financial risk in M&A, quantitative analysis can be very good to solve the problem of the risk."Second part mainly researches on the situation of financial risk in M&A at present. Our government issued a great deal of regulations to regulate the M&A market in recent years; Public organization hold various kinds of forum to explore the existing problem of M&A in china and our enterprises take numerous prudent methods to M&A risks, all sorts of signs show they have already received the extensive concern of various circles of society. In addition, through a large number of M&A cases in china, discover a great deal of financial risks in M&A at present, as follows mainly: transaction risk of state-run property right; principal-agency risk; Blindness risk in M&A; False financial report risk; pricing method risk; narrow financing channel and single means of payment.The third part mainly shows the reason that financial risk in M&A cause. This is afocal point studied by this text. Mainly use the theories of the property right, principal-agency and game to knowledge above-mentioned risks. Transaction risk of state-run property right comes from the special property right structure of state-owned enterprise, namely it is unreasonable to dispose residual claim and control power , cause the ownership of state-owned enterprise (state-run assets committee ) to misplace, form insider control with the possibility of unidentified property right and complicated negotiation and annex; Principal- agency risk does not only relate to insider control but asymmetric information and agent's ethical factor; Blindness risk in M&A is for complication of strategy, entrepreneur ability limited and itself subjective factor existing; False financial report risk mainly result from the opportunism of the targeted company for asymmetric information and audit risk; Pricing method risk is the reason that the internationally agreed pricing methods are limited by the condition , and government's leading consciousness causes the obstacle to fixed price; Narrow financing channel and single means of payment come from undeveloped capital market in china.The fourth part offers the suggestion of evading financial risk in M&A mainly. Our country is in economic transition period at present, M&A is the effective mea...