Research On The Financial Risks Of Merger And Acquisition

With the rapid development of Chinese economy,Merger and Acquisition(M&A)has become a leading trend in the market.Since 2009,more and more companies choose to develop and expand their business through M&A.Benefit always comes with high-risk,M&A is the same as financial risk also follows benefits.How to preventing financial risk when perform M&A,has become the main issue that both local and foreign researchers are interested in.Through analysis of typical M&A cases,risk points in the process of M&A are to be identified.Lessons and experiences from past M&A cases will always benefit our future exercises.The purpose of this paper is to conduct research and analysis the case of M&A of Mengniu company and Yashili company which is one of the largest mergers and acquisitions in China's dairy industry.That marked the M&A boom of China's dairy industry,and far-reaching significance.Through mergers and acquisitions,two giants dairy companies work together to develop new market,improve quality and build world class brand reputation by sharing and complicating resources such as brand,products and sales channels.It also improves the development of whole milk product industry.This essay studied the case by combination of analysis of theory and practice.First of all,studied the M&A theories of financial risk in depth;Secondly,based on extensive and reliable financial information for quantitative analysis of the M&A case,identify the risks in the process of M&A Including M&A evaluation risk in the stage of planning,M&A financing risk in the state of preparation,non-payment risk in the implementation stage and the integration risk in the stage of final merge;Finally the main content of this paper is,through the case analysis,put forward some enlightenment of mergers and acquisitions to prevent financial risks,including by hiring a third party professional organizations do due diligence background research methods such as preventing risk valuation before merger and acquisition process,by reasonable selection and combination of financing vehicles and payment tools to prevent in the process of M&A financing risk and payment risk,through the strategic plan,human resources,financial and cultural integration to prevent integration risks after merger and acquisition process.There are six parts.The first part is the introduction of this article,including background,purpose of the research,contents and features.The second part includes analysis of concepts and theories of Merger and Acquisition;review of the history of merger and acquisitions;evaluated possible risks evolved;trend of research in M&A then illustrated the focus of this article.The third part explains the details of the case study.The fourth and fifth parts are the focus of this article making in-depth analysis of the financial risks,solutions of preventing risks.The final is the conclusion for potential areas of study in the future.Through case study of Mengniu company mergers and acquisitions Yashili company,this article summarizes a series of basic theory.This article has in-depth study and analysis of real data,before in and after mergers and acquisitions process.This will improve the development of company mergers and acquisitions in China and laid a solid foundation for future exercises.