M&A Financing Risk Management

With the continuous development of economy in our country, the improving of the market economy, mergers and acquisitions have gradually become an important way in our country enterprise expansion and development. M&A is a complex activity, which contains many priorities and risk factors, and the financing behavior of merger and acquisition activity is an important factors influencing the success of the merger and acquisition activity results, as one of the important part of mergers and acquisitions, there are many risk factors of different sizes in enterprise M&A financing activities, the enterprise can use multiple financing methods. National enterprise M&A experience shows that the huge financing in mergers and acquisitions become key factors of success. Scale of M&A financing, financing structure, financing method, financing costs, financing risk, enterprises preference to a great extent, determines the final result of merger and acquisition activity.If the enterprise can be combined with its own capital structure, industry characteristics, operating conditions, such as choosing the most appropriate way of financing, the reasonable effective M&A financing risk management, can achieve twice the result with half the effort; On the other hand, if the enterprise of M&A financing risk management is deficient, not only bears a heavy debt burden, are more likely to affect the subsequent enterprise normal business activities. Therefore, M&A financing risk management research has become a worthy of in-depth discussion topic.This essay mainly use Blue Focus as the research subject, by means of M&A financing to comb and expounds related theory and literature, combining the actual M&A financing behavior of Blue Focus, using the risk management theory and method to analyzing, using a combination of qualitative and quantitative acquisition financing risk of Blue Focus, which can identify and use of financial leverage coefficient of the score model and F score for blue Focus measure and evaluation on the overall level of risk, and according to the identification assessment of risk, combined with the risk of Blue Focus control measures and put forward reasonable objective advice about risk management. According to the research:1) the Blue Focus in the national macro economy, corporate strategy, financing arrangements, financing channels and deconstruction, financing timing, refinancing, deconstruction, solvency and capital control there is a big risk; 2) according to quantify the risk of calculation and evaluation, we found that found blue cursor is facing huge risk of insolvency.3) occur at risk before and after the blue cursor does not take appropriate and reasonable risk control measures, make its M&A financing risk in the business activities of enterprises gradually be amplified.4) in the implementation of M&A financing activities, blue cursor did not implement sufficient and reasonable risk management behavior.5) after the enterprise financing, it should be calculated according to actual situation of the enterprise itself rational capital structure range, in the event of deviation, should expand diversified financing channels, to control the risks of the enterprise capital structure dislocation.In general, before the implementation of M&A financing, mergers and acquisitions business should be reasonable acquisition financing activities of the objective of risk management behavior, with related technical theory and combining the actual situation of possible M&A financing risk, which can identify and use objective quantifiable evaluation method to evaluate risk, and take corresponding risk control program, makes every effort to minimize risk of M&A financing; In addition after the enterprise mergers and acquisitions financing, capital structure deviated from its reasonable scope, enterprises should expand diversified financing channels and means to control the influence of capital structure after dislocation brings to the enterprise, promote enterprise merger and acquisition activity smoothly and ultimate success.Finally, the innovation of this study is:apply the risk management theory to research the problem of M&A financing risk, the M&A financing risk management in risk identification, assessment, and control are defined, the qualitative and quantitative. In addition, because the universality and general blue cursor M&A financing activities, so this paper used the relevant theories of M&A financing risk and the measure also can be applied to other enterprise risk management, has a certain reference value.