Research On Financial Integration Risk In The Acquisition Of F Company By ZY Company

Along with fast development of our national economy fast development,the transformation and upgrading of traditional industries,strengthen a multi-ownership’s economic subject initiative,more and more enterprises begin to attach importance to mergers and acquisitions,and select the mergers and acquisitions to scale extension and expansion.Compared to the foreign capital market,China started relatively late,its development time is shorter,and the aspect of theory and practice is not mature.Thus there always presents risk in the process of-M&A.Furthurly in the later stage of merger and acquisition,financial integration risks are often encountered.Once this kind of risks are not solved properly,it will lead to the phenomenon that M&A cannot achieve expected results or even fail.Therefore it is necessary to study the identification and control of financial integration risks.The financial integration risk system adopted in this paper is different from the general financial risk system.The debt guarantee rate is introduced to measure other financial integration risks,and thus the financial integration risk evaluation system is established.Based on this,this paper first analyzed the financial situation and financial integration risk of ZY enterprise for five consecutive years,then extracted four main factors by using factor analysis method,and calculated the comprehensive evaluation score of 67 construction companies in 2014 based on factor score coefficient matrix.It can be seen from the comprehensive score that ZY enterprise ranks 65th in the whole construction industry,which indicates that the financial integration risk of ZY company is extremely high.Finally,the logistic regression model was further constructed after taking four principal components as explanatory variables and the final result is that the probability of financial integration risk of ZY company in the later stage of M&A was 0.68.According to the evaluation results,obtained the ZY company’s financial integration risks is embodied in three aspects,the prevention measures are put forward:(1)control the risk of profitability ability in the later stage of M&A by strictly controlling product quality,keeping brand good image;(2)control the operation capacity risk in the later stage of M&A by maintaining a reasonable capital structure and improving the payment collection speed;(3)control the debt paying ability risk in the later stage of M&A by reasonably planning borrowing funds and borrowing period.