Research On The Financial Risk Of M & A

M&A, the abbreviation of merger and acquisition, refers to a kind of investment action, through which one enterprise can control another one by means of obtaining part or whole property right of the latter. As a kind of enterprise actions, it is welcomed by nations of companies in the world, because it can bring the enterprise with kinds of effects such as economy scale, resource deploy, combination coordinating. If the enterprise want to expand the scales, enhance their capabilities and promote enterprise development, it can through the accumulation of content-type growth and epitaxial growth, It is through epitaxial growth of M & A to promote rapid growth of enterprises. Through mergers and acquisitions, a company may purchase all or part of another company's assets or property rights to control and affect the acquired business, to enhance their competitive advantage and achieve business objectives and so on. M&A is the important measure of enterprise's quick expanding, also the important formats of carrying out recombining assets in enterprises, From the social point of view, it is the important approach of optimizing social resources.However, according to research, in those cases, successful cases were just thirty percent, and its reason most can be cast back with financial risk. Analyze the failures in the past then we can find many reasons for this resul, but the financial risk is a factor which is particularly important. The reason is that M&A from the economic substance is a long-term investment behavior, during which complex financial activities, financial risk is inevitable. Sometimes, The consequences of financial risk is fatal. M & A activities as a high risk investment, we see it brings tremendous benefits, at the same time, we should get the insight into the risk hidden behind, therefore, the issue of M & A risk and prevention study is particularly urgent and important. This article is based on this, from the basic theory of M&A, First analysis the ffinancial risk of M&A to the enterprise, then make preventive measures and specific recommendations.This thesis is divided into five parts:Chapter 1 is an introduction, mainly on the development of the global wave of M&A and research background to grasp the analysis of topics, including the background and significance, of the content and method.Chapter 2 is the related theories of M&A, and financial risk. First, define the M & A content and classification, second section describes the foreign and motivation theories, including M & A related concept, purpose and related risks, and from which leads to M & A risk of financial risk, and introduces financial risk definition and identification and the basic content of M & A financial risk:the assessment of the value of target companies, corporate finance and M & A payment of financial integration.Chapter 3 is the pre-merger financial risk-assessment of the value of target companies. First, analyzed the need for objective assessment of enterprise value, then analyzed the assessment of the target enterprise value and sources of risk. Proposed risk management approach, Finally, the cited cases of business valuation are analyzed.Chapter 4 is the process of mergers and acquisitions of financial risk-M & A financing and payment. Factly, payment and financing are complementary the two aspects, and eventually comes down to a question:enterprises use what kind of financial instruments for financing, Therefore, we can call the both as M & A financing payment. The article first introduces the risk of financing payment forms, causes and risk management measures, and finally study it through a case.Chapter 5 is after merger financial risk-financial integration. as the implementation of protection, M & A integration can not be ignored, financial integration is in merger integration issues must be faced. Described in detail the forms and sources of the financial integration risk, proposed avoidance measures, and use a case study.Chapter 6 is closing. Paper mainly discusses the innovation and deficiencies.This paper focuses on M & A in the process of financial risks, and explore ways to effectively control these risks, innovative work have done mainly due to:(1)It is not just about the financial risks and the Pan-control problems, instead, financial risk is divided according to M & A process, Summarized the M & A activity may occur at every stage of the specific financial risks.(2) combined with experience in M & A case, analysis financial risk factors lead to failure In-depth, then put forward practical financial risk control measures.With the financial risks during the acquisition of research, I feel that the topic still have many shortcomings, it is worth continuing in-depth study of aspects.