M&A Financial Risk Management

Globalization has been a consensus of all countries of enterprise development, which makes the matter is the region in which businesses have to face fierce competition from other area businesses, companies want to get better development, we must expand their scale and improve competitiveness to capture more and more market share, and therefore a phenomenon attendant-mergers and acquisitions. Many enterprises in China to grow, such as Haier, Chunlan Group, March medicine, etc. in the merger. But there are also high-risk acquisition, empirical studies show that the proportion of mergers and acquisitions fail completely and without any effect of the acquisition of all M&A activity up42%-56%. M&A is a high-risk business activities, only fully aware of the merger in order to avoid the risk of making acquisitions trap success.The risks involved in mergers and acquisitions, including financial risk, market risk, policy risk, etc., among which the financial risk is particularly prominent. This paper selects Tangganggufen merger Handan Iron&Steel and Chengde event for the study, revealed that the three steel companies financial risk exists in mergers and acquisitions. Tangganggufen successful acquisition of Handan Steel and Chengde from multiple perspectives reflect the financial risk of China’s iron and steel industry mergers and acquisitions commonly encountered major mergers and acquisitions revealed by this paper, in-depth analysis of financial risks:Target value risk, payment risk, mergers and acquisitions after integration risk. Meanwhile, the article analyzes how companies manage against these risks, achieve the purpose of risk control. Finally, the acquisition of Handan Steel and Chengde Tangganggufen several success factors summarize, it is worth learning from our other businesses.