Research On The Financial Risk Control Of Mergers And Acquisitions

As global economy constantly grows at present, enterprises choose to annex other corporations one after another with an aim to obtain resources which they fail to own. However, merger, instead of being a simple activity, is involved with all aspects of related fields. During mergers, it is more likely for some uncontrollable factors to arise. The research on financial risks of mergers and acquisitions is not only beneficial to enterprise development in a favorable direction, but conducive to the promotion of economic construction and productivity progress.Contents of this paper are as follows. First, the Introduction describes the relevant background, theoretical significance and positive impacts which are generated in reality. Meanwhile, research methods are also illustrated; literature material law is adopted to look over the corresponding books so as to get acquainted with specific research situations of such a subject all around the world. As a result, theoretical guidance can be provided for this paper. Second, definitions of related concepts and fundamental theories are presented so perform a comprehensive elaboration on theories which are involved in such a research procedure, including concepts and its definition for mergers and acquisitions of financial risks. In addition, other associated theories such as the synergy theory in M & A and risk management theory are analyzed to perfect theoretical framework of it. Third, financial risk categories of enterprise merger and acquisition are discussed about together with their cause analysis to introduce diverse risks as well as their categories, causes and influencing factors, etc. that take place in the process of M & A. Fourth part is the case of Yashily merger by Mengniu Dairy. A case analysis method is employed to introduced details of this event, including background of the merger, introduction to status of both parties, process of M & A and eventual outcomes; then, financial risk assessment is carried out for this M & A case and financial risk prevention and control measures which have been taken are presented as well, followed by summary of experience and inspiration which are brought to us by it. Furthermore, the financial risk prevention and control strategy is created for the process of enterprise M & A; to be specific, based on the theory and case analysis mentioned above, such a strategy is put forward from perspectives of pricing, financing payment and integration, etc.. In the end, not only are research conclusions summed up, but deficiencies existing in this research are analyzed in an objective manner together with the definition of future research direction.During this study, the case analysis method and the literature research method are combined with a hope to provide references for merger and acquisition activities of enterprises in the future.