Research On Financial Risk Control Of Zhefu Holding’s M&A With Shenlian Environmental Protection

In recent years,China’s economy has maintained rapid development.However,the high-speed development also brings a certain price,the environmental problems are becoming increasingly prominent.Therefore,China has begun to attach importance to and develop the environmental protection industry,not only focusing on environmental protection enterprises in terms of capital investment,but also promulgating a series of environmental protection laws and regulations,such as the New Environmental Protection Law and the Soil Protection Law.At present,the development of environmental protection enterprises in China is also blooming.There are central enterprises and local enterprises.What’s more,private enterprises and private-owned enterprise are also involved.As the competition among environmental protection enterprises is becoming more and more fierce,it is inevitable that there will have mergers and acquisitions by the industry giants and other business practices to develop themselves,aiming at establishing a comprehensive enterprise platform,integrating the enterprise business,expanding and perfecting the industrial chain.Based on the research on the financial risks of M&A of environmental protection enterprises,this study selects the first new A-share environmental protection stock—Zhefu Holding as the research object,and conducts research and analysis on the case of Zhefu Holding’s M&A with Shenlian Environmental Protection.The author has read a lot of literatures when studying this case,such as the definition of M&A,the content of M&A,the risk identification and evaluation of M&A and other relevant literatures.After reviewing the literature,the author first analyzes the current situation of M&A financial risks in China environmental protection industry,and then introduces the background of Zhefu Holding’s M&A with Shenlian Environmental Protection,the development history of both parties to the merger and the merger process.Next,the study analyzes the motivations of M&A and evaluates financial risks by using the Z model.In addition,the thesis also explores the valuation risk caused by the valuation of the target enterprise in M&A,the financing risk in M&A,the payment risk and the financial integration risk after M&A.Finally,corresponding control measures are proposed for the enterprise’s valuation risk,financing and payment risk and financial integration risk.