Analysis Of Financial Synergies In Mergers And Acquisitions-take The Acquisition Of Wang Fu Jing To Printemps As An Example

Since the end of the 19 th century, the western countries using the technology revolution as the driving force, has experienced five big waves of mergers and acquisitions. Its scale and influence is wide enough to see that acquisitions as a strong power of enterprise development road has unshakable status and influence. Now the world economy is getting through the new period of rapidly development, globalization and integration process is accelerated. As the Continued warming economic phenomenon, mergers and acquisitions will constantly tend to be abundant, mature and specification. As a strategic way of external expansion, Mergers and acquisitions’ initial motivation is always associated with cost control, saving expense, but it is not necessarily can bring us financial synergy effect. In the process of mergers and acquisitions will spend a lot of money, this may lead to acquisitions party eventually pay much than the budget, then could increase the operating lever and reduce the flexibility of capital allocation, make the enterprise fall into financial difficulties. So, more in-depth and comprehensive research of M&A is conducive to its guidance for mergers and acquisitions practice better.This paper adopts the method of literature research and the analysis of typical cases. Firstly, the article studies and explores theoretical research results at home and abroad, introduces the concept of corporate mergers and the main mode of mergers and acquisitions in modern society, comprehensive analyses the M&A motivation. Then carries on the definition and classification of merger synergies, focus on the financial synergies, analyze the positive and negative financial effects of mergers and acquisitions under the guidance of enterprise M&A financial synergies related theories. That mergers and acquisitions can’t bring financial synergies under any circumstances. We should fully realize the all kinds of value loss factor in mergers and acquisitions, not to blindly pursue synergies, then using part of the mathematical statistics and operations research method to construct analysis framework of financial synergies, so that to analyze whether WangFuJing international will obtain corresponding financial synergies under each evaluation standard by merging Printemps. This framework broke through most scholars’ evaluation of enterprise M&A synergy overall in the past, lies the article’s main innovation points.By combing the theoretical knowledge and the case analysis, the author thinks that whether M&A can quickly achieve positive financial synergies in the short term(financial forecast effect and reasonable tax avoidance), mainly depends on the determination of target and the choice of payment; And lasting improvement of mergers and acquisitions’ financial synergies(reduce the financing cost, to raise the debt capacity, improve the efficiency of cash flow, reduce the risk of bankruptcy), are more dependent on financial integration after the merger. The M&A party should formulate a reasonable strategy before M&A, and should according to its strategic intention to choose the appropriate object of mergers and acquisitions at the right time. When choosing M&A payment, the enterprise should consider financial risk, financial synergies target as well as the company’s cash flow situation. Given the financial integration an irreplaceable role in process of realizing financial synergy, enterprise should choose appropriate financial integration mode based on the specific situation. Integration process should pay attention to avoid financial risks, in order to obtain lasting positive financial synergy effect.