Study On The Financial Risk And Control Of Baosteel’s Merger And Acquisition WISCO

In the process of development of China’s iron and steel industry,there are some problems,such as low industrial concentration,single product type,mismatch between demand and supply.The state has issued many policies from a macro perspective,and iron and steel enterprises have been looking for a way out.M & A is an effective measure they can choose.After M & A,enterprises should adjust their structure and carry out transformation and upgrading,effectively use social resources,and promote the formation of large-scale enterprises and achieve rapid development.Although there are many advantages in M & A,the existing risks can not be ignored.Each step forward may bring different risks.Among the risks of M & A,the most important is the financial risk.Whether the potential financial risk can be effectively controlled or not is related to the final success of M & A.Therefore,from the perspective of the financial risk of M & A,this paper studies the measures to control the financial risk of M & A in China’s iron and steel enterprises by using literature research and case analysis.Firstly,this paper divides the related theories of financial risk of M & A into four parts,which are the definition,cause,type and control of financial risk of M & A,deeply studies the research results of scholars at home and abroad,and analyze and summarize four kinds of financial risks in M & A,including M & a pricing risk,financing risk,payment risk and financial integration risk And then put forward the suggestion of risk control.Secondly,taking Baosteel’s merger and acquisition of WISCO as a case,this paper combs and analyzes the case,then summarizes the possible financial risks of the merger and acquisition,and analyzes whether the corresponding control measures taken for each specific risk are effective.In the process of analysis,it is found that in addition to controlling the above four risks,before the merger and acquisition of the two enterprises,Baosteel WISCO also adopted the way of free transfer of shares to participate in voting decision-making to promote the merger and acquisition process and with the help of the role of the government,which to a certain extent reduced the pressure before the merger and acquisition;however,in the process of merger and acquisition,there are also deficiencies in risk control,such as Baosteel Withoutreasonable financing in combination with its own capital strength,WISCO has loopholes in capital integration before M & A.Finally,according to the results of the case study,this paper summarizes the possible financial risks in the process of M & A in China’s iron and steel enterprises,and draw relevant conclusions : first,attach importance to the pricing risk of M &A,reasonably determine the payment price;second,focus on the financial integration risk to maximize the value of the enterprise;third,actively use the power of the government to reduce the pressure of M & A;fourth,focus on The unique financial risks of M & A in iron and steel industry should be prevented in time.