Research On Financial Risk Management Of Securities Firms In Mergers And Acquisitions

In recent years,China's securities industry is increasingly competitive,and China's major securities firms urgently need to improve their comprehensive strength so as to be able to stay in the invincible position in the fierce competition.Merger and reorganization has become an important way for all major securities firms in China to expand capital scale and business scope and enhance the competitiveness of enterprises in the future.However,as a special investment financing project,the risk always runs through the whole process of merger and acquisition activities,the financial risks in especial.This paper will analyze the financial risks that may be faced in domestic brokerage mergers and acquisitions,including the causes,types of financial risks.This will provide a theoretical reference for securities companies to identify and deal with financial risks in M&A.After knowing about the basic theory of financial risk,the article focuses on this typical case,the article is written from the angle of Founder Securities,this paper discusses the management measures.In the preparation stage,Founder Securities choose strategic decisions of the target company risks as well as the valuation of the target enterprise,after careful analysis of their own as well as investigation of the target enterprise,the Founder Securities selected the China Minzu Securities as the object;The employment of professional intermediary agencies is good for the service and supervision of the M&A process,and the application of the market method has obtained more objective and reasonable valuation results.In the implementation stage,the financial risk mainly comes from the financing channels and the limitation of the financing structure of financing risk and the inherent limitations of M&A payment,Founder Securities issued huge bond to supplement capital;The selection of the exchange absorption merger avoids the financial pressure brought by excessive cash flow,in the process of integration,debt paying ability drops,the establishment of a unified fund management system and modify profit distribution plans to maintain reserves;In addition,through integration with the acquired region and business,it can expand the competitive advantage and enhance the profitability.Under the new normal of the development of the securities industry,it is not uncommon for securities firms to strengthen their own strength.This paper responds to M&A acquisitions of financial risk management measures,the article also mentioned the financing channels,the domestic capital market development and other factors,financial risk can also be controlled from these perspectives.The factors of financial risk are hidden in the process of M&A,and it is necessary to comprehensively and deeply control the details of each aspect to balance the relationship between risk and benefit.The research on the prevention and control measures of financial risk is not accomplished overnight.It needs to be found in the empirical research and practical application.