Research On Financial Risks Of Enterprises' Mergers And Acquisitions

With the deepening of economic globalization, the Western capitalist countries have already taken place in five waves of mergers and acquisitions. Mergers and acquisitions continue to go from the low-level to senior, and has become an important way that the capital of foreign enterprises expanded into the international market. In recent years, China's enterprises are becoming increasingly active on M & A activity. M & A has become an effective manner for China's enterprises to expand business scale and to participate in international competition. But from our M & A situation, there aren't many real success stories, most of the mergers and acquisitions are ended in failure. Looking into these failed cases, we can find one of the important reasons, namely, M & A in the presence of financial risk. How to prevent the financial risk in corporate mergers and acquisitions becomes a problem that China's enterprises must face and solve in the merger and acquisition activities.In this paper, generally follow the "questions - analyze the problem - to solve the problem". The basic idea is, first proposed the financial risks existed in M & A process, and then analyzes the the causes of the major financial risks, and propose specific methods to prevent or reduce these risks accordingly, based on the theory, analyzing the M&A case of Lenovo Group Limited. Finally, this paper put forward the conclusion of the factors impact six major financial risks of Mergers and Acquisitions, and risk management measures against every above mentioned financial risks.