M&A And Researching Its Risks

Only in a well-developed economy and mature condition of the comodity production, the M&A can become a constant event. Of course, in its essencial, M&A business is regarded as to buy company from others, in anothre word that is put the company as a general commodity. Modem economic theory says that the common commodity or service are produced or provided by a company, the value of the concerned commodity or service are as equal as the average time of social labour, the price is decided by the use value and fair-Alupresent in China, the research on M&A for private enterprises were lacked at this aspect, but we couldn’t avoid the reality of the developing sutiation of them. As the growth of the private enterprises are in an increasingly way the demands on M&A will rose accordingly. But because the M&A is an important style which produced by competition between many economies, so it is showing a high risk. This dissertation analyses the concerned risks about M&A on the basis of reality.after illustrating a sample of KD CO. absorbed LD CO., with comparing the financial condition between both of them, from the point of view of economy to confirm the M&A. Aftermath, stating what kind of risks exsiting during the action, suggesting how to avoid them with effetive measures and got more useful experience and relative knowledges.Framework for this dissertation:First to introduce the research background, the meaning, the purpose and the logical frame. The second, to review the main elements of the acquisition, through an analysis of specific case to make concerned conclution, finally making suggestions to reduce risks during acquisition.The case of KD absorbs LD that shows a really succeessful acquisition, there are some reasons that listing here. Making a proper strategy on acquisition, steering the direction of development in the industry, carrying out a due-diligence investigation to get fully information about the enterprise, giving concerned dilimitation of property right, throught master the transaction price, and etc, so as to integrate all of the resource efficiently.