A Case Study On The Financial Risk Management Of The M&A Of Chengdu Yingde By Xinhua Medical

In the context of macroeconomic decline and industrial restructuring,China’s M&A market has entered a new stage of development,and more and more enterprises choose M&A to enhance their competitive strength.Compared with the pharmaceutical industry,the medical and health industry started late but developed rapidly in China,with the majority of small and medium-sized enterprises,fierce market competition,and high technical and market barriers.Therefore,enterprises generally adopt extensive mergers and acquisitions to achieve endogenous growth.However,there are many risks in the whole process of merger and acquisition,especially the financial risk,which runs through the whole process of merger and acquisition.If there is a problem in some link,it is likely to directly lead to the failure of merger and acquisition.Therefore,the proper management of financial risks is the key to the success of mergers and acquisitions.This paper takes the merger and acquisition of Chengdu Yingde by Xinhua Medical Company as the case,analyzes the motivation of the merger and acquisition and the financial risks faced by each stage of the merger with the help of literature analysis and case analysis,and explores the risk control measures and effects.This paper firstly introduces related concepts and theories on the basis of literature research.Secondly,it introduces the general situation,merger motivation,merger process and merger result of Xinhua Medical and Chengdu Yingde.Then,combined with the relevant theories on the risks of mergers and acquisitions,according to the financial activities and industry characteristics of Xinhua Medical Before,during and after the merger and acquisition,analyze,identify and control the pre-merger valuation risk,the financing payment risk and performance commitment risk in the merger and acquisition,and the post-merger financial integration risk.Finally,it puts forward corresponding prevention Suggestions,so as to help other enterprises to fully identify,control and prevent possible financial risks during the merger and acquisition activities.Xinhua medical to Chengdu in this paper,the main conclusion is that the mergers and acquisitions activity in the whole is failure,not only failed to achieve synergies for Xinhua medical,back to the increased likelihood of developing a series of mergers and acquisitions of financial risk,such as mergers and acquisitions before because of the inappropriate caused high premium valuation method of the evaluation results,led directly to Xinhua medical adds unnecessary cost,triggered before M&A valuation risk;Secondly,the unreasonable financing payment method in the merger led to the risk of twice dilution of the equity of Xinhua Medical;Finally,due to the lack of timely integration speed after the merger,Xinhua Medical Was faced with great financial pressure,which led to the financial integration risk after the merger.Beginning and end of the financial risk of merger and acquisition activity throughout the visible,whether for financial risk identification and control right has a crucial influence to the success of mergers and acquisitions,as a result,this paper revolves around the M&A of Xinhua medical in this case identification,analysis and control financial risks,with some inspirations for other enterprises in the merger and acquisition activity.