Prevention Of Financial Risks In Multinational Mixed M&A

At present,many group companies in the world have adopted a diversified business model.In developed countries such as the United States and Japan,diversification of business groups has become mainstream.Since diversified operations are involved in multiple product markets and develop products in multiple business areas,it is possible to effectively avoid the limitations of single products and reduce operational risks.At the same time,diversification also helps companies to increase their visibility.In the process of diversification,the way of adopting mixed mergers is undoubtedly more direct,simple,and requires less capital than direct investment.However,any transaction has its advantages and disadvantages.In order to obtain high income,it is necessary to bear high risks.When modern enterprises engage in mixed mergers and acquisitions,the first thing that needs to be solved is the financial risk problem.This paper takes hybrid M&A as the main body,and studies the M&A behavior of foreign companies as target enterprises,namely,cross-border M&A,analyzes the financial risks of enterprises in cross-border M&A activities,and proposes preventive measures for their financial risks.First of all,after reading a large number of domestic and foreign literatures,this paper clearly defines the relevant concepts of cross-border M&A and its financial risks through induction and analysis,and determines the theoretical basis of this paper.Secondly,on the basis of theory,the motives of cross-border M&A are analyzed,and the financial risks of M&A are divided into four categories:pricing risk,financing risk,payment risk and integration risk,and four financial risks are identified and analyzed.Proposed measures and recommendations for prevention.Finally,a case study of the merger and acquisition of Yinyi Real Estate CO.,LTD in Punch Powertrain N.V was conducted.Through research,it can be concluded that cross-border M&A has greater financial risks than horizontal mergers and vertical mergers,and the mergers and acquisitions belong to different countries,which makes the merger more uncertain.Therefore,when conducting mixed M&A activities,enterprises should conduct a comprehensive and detailed investigation of the target enterprises and their industries,carefully select target enterprises,improve information asymmetry,reasonably evaluate enterprise value,and reduce pricing risks;diversify financing and choose diversification.The payment method and reasonable use of hedging tools to prevent foreign exchange risks;comprehensively integrate enterprises after mergers and acquisitions,and establish a sound financial early warning system.Through this series of preventive measures to reduce the financial risks of cross-border M&A,improve the success rate of cross-border M&A,and ensure the smooth flow of cross-border M&A activities.