Research On The Financial Risk Assessment And Control Of Longyuan Power's M&A Activitie

In recent years,in order to achieve the goal of expanding business scale and increasing market share,enterprises have continuously increased the number and transaction amount of mergers and acquisitions,and mergers and acquisitions have entered a white-hot state in China.Longyuan Power aims to enhance its professional technical capabilities in energy and achieve resource optimization by acquiring assets,technology,and markets from Pingzhuang Energy and eight wind power companies through mergers and acquisitions,in order to gain economic benefits and economies of scale,and complete the strategic plan for the rapid expansion of the energy industry.However,due to the uncertainty of the market environment and external industry environment,the asymmetry of information held by both parties in the merger and acquisition,as well as the observable existence of risks,different financial risks may arise during the merger and acquisition process.How to effectively identify,evaluate,and avoid financial risks in the merger and acquisition has important theoretical and practical significance for Longyuan Power.This article combines theoretical foundations with case studies,and first reviews the research literature and basic theories on financial risks in corporate mergers and acquisitions.Then,a detailed identification of financial risk factors for the merger and acquisition activities of Longyuan Power was conducted,including four major aspects:enterprise valuation and pricing risks,financing and payment risks,and integration risks after the merger.A financial risk indicator evaluation system for enterprise merger and acquisition was established,and the Analytic Hierarchy Process and Fuzzy Comprehensive Evaluation Method were used to finally obtain the financial risk evaluation results of Longyuan Power’s merger and acquisition.Based on the prevention measures for financial risks in Longyuan Power’s current merger and acquisition,this article briefly elaborates on the effectiveness of the merger and acquisition.Finally,corresponding preventive measures and inspirations are drawn from this merger and acquisition case.The final evaluation result is that the overall financial risk of Longyuan Power’s merger and acquisition is relatively low,but the proportion of integration risk is relatively high.After the merger and acquisition,special attention should be paid to the occurrence of integration risk,and preventive measures should be strengthened.Corresponding control measures should also be taken for other types of risks.Longyuan Electric Power,as the first project in China to simultaneously implement stock exchange and merger,asset sale,and asset purchase,has a large transaction scale.The research on the financial risk evaluation and control of its merger and acquisition also hopes to provide reference opinions for its subsequent merger and acquisition activities,provide reference value for the evaluation and control of merger and acquisition risks for similar enterprises,help other companies prevent financial risks in mergers and acquisitions,promote enterprise development,and improve market competitiveness.