The Study On Credic Risk Of Mergers And Acquisitions Based On Zeta Model

The history of global business growth is a huge history of mergers and acquisitions. Historically, the United States has appeared five times larger waves of M&A, which is expanding to Asia. Currently the number of mergers and acquisitions on China’s capital market and acquisitions business asset are increasing year by year. Most of mergers and acquisitions happed by equity transaction, and also presented the regional characteristics. Under the international environment shadow of the European debt crisis and finance crisis, and under the period of rapid development of economic which is restructuring, there are also their own problems in the mergers and acquisitions of Chinese enterprises.This paper systematically analyzes the meaning, motivation, type and risk of mergers and acquisitions. Meantime, specifically analyzes the motives and the synergies of horizontal mergers, vertical mergers and mixed acquisitions and compare their difference and common.Based ZETA model, the paper selected60companies from listed companies as samples and eight financial indicators, and then calculated all parameters of variables in the model by using Fisher discrimination law. The ZETA model had been inspected successfully by using sample data.And the rate of text was over90%.And then I use the successfully inspected model to score the credit risk of M&A qualified.This paper selected Shanghai Lianhua Supermarket and Hualian Supermarket acquisition case, and Yunnan Copper and China’s Aluminum Co. merger case to make a analyze as a horizontal merger cases; selected Boyan soft and Extend Logic merger cases, Kangmei,Xinkaihe and Meifeng acquisition to make a analyze as a vertical merger case. Compare the change of ZETA value before and after the acquisition, analyze of the difference of synergy between horizontal merger and vertical mergers. This paper argues that horizontal merger produce great synergy, but this will not immediately do until make effective integration within the enterprise; Vertical mergers form short-term synergy due to the convenience of the enterprise supply and transportation, and reduced transaction costs, which cannot sustain. Vertical mergers happen within different industries, so it brought about greater difficulty, which often brought greater risk, which increases the business risk in the late and reduce ZETA value.Finally, this paper analyzes the reasons for corporate credit risk arising from mergers and acquisitions, and propose appropriate measures:for the external environment, the government should reduce administrative intervention and improve the laws and regulations of mergers and acquisitions; accelerate the construction of domestic capital markets,play well an auxiliary functions of intermediary structures; for business itself, the M&A business on the one hand do well preliminary work before acquisitions:strategic planning, screening of the Target Company, on the other hand, finish the post-merger integration of cultural, strategic, financial and other aspects, in order to enable enterprises to play the post-merger synergy, thereby reducing the credit risk of corporate mergers and acquisitions.