Mergers And Acquisitions Of Financial Risk And Its Prevention

M&A is one of the effective ways to realize rapid expansion for enterprise. M&A originated in western in 19th century, and so far western countries has experienced four M&A waves, and the fifth is in the ascendant. Along with rapid development of our country socialist market economy and influence of global economic integration, more and more Chinese enterprises began using the capital operation means to accelerate the development of the enterprise. M&A, as a special investment activity, the risk can not be ignored, especially the financial risk, and many enterprise merger activities failure because of the financial risk, even the enterprise being into crisis finally. So, how to prevent the financial risk of M&A activities also becomes the focus that the academic and business pay more and more attention to.Based on the theory of M&A, the writer uses qualitative analysis and quantitative analysis to analyzes the financial risk of the merger and puts forward some preventive measures, using project management, management, marketing, accounting, financial analysis and multi-discipline knowledge comprehensively. In the first place the thesis expatiates on the concept of M&A and the financial risk of M&A and relevant theories. The financial risk of the merger refers that the financial position of the enterprise becomes degenerating because of the various financial activities in the process of merger, so that enterprises have the possibility of loss. And then according to the process of M&A, the M&A activity is divided three stages including value evaluating of the target enterprise, financing and paying, and integration. And then the thesis analyzes the financial risk in each stage of the M&A activity and give the preventive measures, and introduces actual cases in each stage and analyzes these cases using the front theories. Finally, the writer summarizes the achievements and insufficiencies of the paper.