Study On Risk Management During Enterprise Merger And Acquisition

In 21 st century the acceleration of global economic integration provides unprecedented opportunity for economic development, and brings about increasingly fiercer international competition. Enterprise merger and acquisition is an important approach to reinforce power and combat the global economic integration. In China,enterprise merger and acquisition is new experience, and relevant legislation and institutions lag far behind the demands; as a result, when a great number of issues emerged during enterprise mergers and acquisitions, we do not have legal norms to rely on, and some cases even resulted in chaos simple because of multiple management. The problems brought by enterprise merger and acquisition are worth thorough research, and this thesis will focus on a relevant issue, i.e. risk management.To start with, this thesis specifies several major driving forces for the emergence of enterprise mergers and acquisitions, narrates about the agent doctrine that may cause negative effects, and next to it is a list of categories classified in correspondence with different standards, as well as an introduction of the potential drawbacks of each mode. In the present study, enterprise mergers and acquisitions is included in the category of project management so as to make use of the systematical theories in this field to shy away from the most easily negligible problems created during the process of merger and acquisition, thereby completing integration efficiently and conveniently. When this aim is accomplished, naturally economic profits will follow. When we use risk management during the process of enterprise merger and acquisition, all the potential risks will be exposed. With regard to the commonest ones, risk identification methods are proposed, which are capable of identifying a majority of risks of merger and acquisition as well as integration. Withproper methods and techniques, the major part of all risks should be able to be ruled out or transferred.This thesis introduces the merger and acquisition process while taking example from the real merger of D Enterprise launched by J Investment Corporation. The detailed process includes: to clarify self-development strategy, to set up standards for targeted enterprises, to search for potential targets, to initiate the primary selection through value-assessment and thorough investigation among the target enterprises, to decide on a single target, to analyze potential financial, legal and market environment risks, and finally to design a most appropriate approach for this merger and acquisition. Meanwhile, viewed from a different angle, D Enterprise was highlighted and shed light on the experience of going through merger and acquisition. From three different standing points--- the merging party, the acquired party, and the government,this thesis discussed about how to avoid potential risks in details, laying special emphasis on the risks generated from the hazardous agent doctrine and various marketing risks that the merging party may be confronted with before, during and after the merger and acquisition process. Correspondingly, it pointed out every unfavorable consequence caused by the risks alongside with the measures to tackle them.To sum up, enterprise merger and acquisition is a systematical project. To make sure the completion of a merger or acquisition, it’s necessary to treat it as managing a project, and to add merger and acquisition into the study domain of Project Management. It’s also a must to identify and try to avoid various possible risks in scientific ways. Meanwhile, this thesis attempts to straighten out the commonplace problems that occur during the process of merger and acquisition, and to propose some countermeasures for Chinese enterprises. In a word, I wish the findings provided by this thesis would exert some positive effect on the theoretical study or practice of merger and acquisition in our country.