Research On M&A Financial Risk Assessment And Countermeasure Of JiYi Pharmaceutical

In recent years,the "Health China" strategy has been gradually implemented in China,and the new drug registration system,drug consistency evaluation,new version of GPM certification,two-ticket system and other medical reform policies have promoted the standardized and integrated development of the pharmaceutical industry.Thanks to the improvement of policy environment and the strong attention of social capital,the number of mergers and acquisitions of pharmaceutical enterprises in China continues to grow,and many enterprises have joined the army of mergers and acquisitions for the motives of expanding market scale,improving industrial chain layout and obtaining synergy effects.However,behind the high benefits of M&A lies a huge financial risk,and the financial crisis caused by M&A activities has occurred from time to time,and the failure rate of M&A remains high.The ability to scientifically identify,correctly evaluate and effectively respond to M&A financial risks is the key to successful M&A.This paper firstly introduces the concepts related to M&A finance and classifies them into financing risk,investment risk,operational risk and allocation risk from the perspective of risk representation;secondly,it identifies the financial risks of GI Pharma M&A cases and finds that after GI Pharma Holdings completed four M&A transactions in 2018,the corporate situation continued to deteriorate and the financing risk,investment risk and operational risk were concentrated in the late stage of M&A integration;again,it applies The entropy value method and the efficacy coefficient method were used again to construct an evaluation system to quantitatively evaluate its M&A financial risks,and the evaluation results showed that the M&A activities made the company’s financial situation deteriorate rapidly,and the financial risks changed dramatically from general risks to significant risks,and the enterprise fell into a financial crisis;then,through a comprehensive analysis of the evaluation results,it was found that the causes of the M&A financial risks in the JI Pharma M&A case lie in the existence of the target enterprise valuation decision,the financing payment decision and the post-merger financial risks during the enterprise M&A process.Finally,the following targeted countermeasures are proposed to address financing risks by changing a single financing method,choosing diversified payment methods and strengthening post-merger liability integration,addressing investment risks by improving the accuracy of target company valuation and paying attention to financial management strategy integration,and addressing operational risks by paying attention to post-merger asset and financial management and system integration.