The Research On The Process Of M&A Of State-owned Enterprises' Financial Risk And Its Prevention

Well-known American economist, Nobel Laureate in Economics, George J. Stigler said, in the history of contemporary economy, it is a breakthrough for enterprises to become large-scale groups by reorganizing their rivals. Promoted by the market globalization and information globalizations as well as the fast development of high and new technology, the allocation of production factors are becoming open and dynamic. For our country, merger and acquisition (M&A) of state-owned enterprises still has its special function: promoting the stock-system reform of state-owned enterprises, so as to gear with the international advanced enterprise management model, and then to make the state-owned enterprises larger and stronger, namely, realizing fast outer development through enterprise M&A, eventually achieving the successful restructuring of the economic system. But, M&A is a kind of capital operation with high risk. According to statistics, the success ratio is no more than thirty percents. Therefore, it has important real significance to enhance the management of financial risk during the process of M&A of state-owned enterprises.With the basis of the enterprise M&A theory and risk management theory, this article starts from the definition, content, identification and prevention measures of financial risks, then concludes the current research achievements for the financial risk in M&A of state-owned enterprises. In consideration of the characteristics of state-owned enterprises conditions, procedures and current conditions of M&A of state-owned enterprises in our country, this article analyzes the impact of financial risks of M&A of state-owned enterprises, then defines them, and uses the risks with the fuzzy mathematics method and Delphi method, finally puts forward relevant prevention measures based on the features of different periods of enterprise M&A.According to the characteristics of M&A of state-owned enterprises, this article guards against the financial risk of M&A of state-owned enterprises. The measures about guarding against the risk of target enterprise value are: conversing the functions of government within M&A of state-owned enterprises, so as to give more decision-making power to state-owned enterprises, then state-owned enterprises can be made in accordance with their own development needs, to choose more appropriate strategies for M&A. Paying full attention to state-owned enterprises due diligence in M&A to strengthen the selection process the target enterprises. Using fuzzy mathematics on M&A of state-owned enterprises in the assessment of the value of the target enterprises; The measures about guarding against the risk of financing the payment are: Developing China's capital market as soon as possible, and improving the financing of M&A of state-owned enterprises -related laws and regulations. State-owned enterprises should choose the use of hybrid acquisition payment; The measures about guarding against the risk of the financial integration is through the establishment of a network of three-tier system of financial management, as well as through the strengthening of the stock of assets, cash flow and debt consolidation to reduce the quality of the risk of financial integration.