Financial Risk And Countermeasures Of The Merger Integration

Abstract:Mergers and acquisitions (M&A) has become the main way of business expansion, merger and acquisition integration is the key to achieving targets of the mergers and acquisitions. Therefore, the risk of merger integration has become the biggest risk of M&A success. Failed merger integration will not only cause a huge waste of money, resources and manpower, but also cause enterprise missed development opportunities, weakens the core competitiveness of enterprises, eventually led to the failure of M&A. The financial risk is one of the main risk of the consolidation stage, how the merger integration process of financial risk identification and assessment, timely and effective manner to prevent the integration of the financial risks and achieve the ultimate goal of merger synergies, is an urgent need to study and solve subject. In recent years, this issue has become a hot topic in the field of scholars and experts concerned.Papers on M&A integration of financial risk assessment and prevention were studied. First, the merger integration of financial risks were identified, including the risk asset structure of the target company, the integration of financial risk, financial risk, and financial industry managing risks. Further, the paper studied the merger integration of financial risk assessment. Risk assessment model is based on three methods of comprehensive use. Combined with the coal industry, the balance is high, large inventory, etc., built to solvency, operational capabilities, such as the main core business conditions index system, to select a representative financial indicators using factor analysis and determine its importance extent, the use of expert opinions method to determine the extent of the role of each financial factors, namely the risk probability. On this basis, through the gray correlation evaluation model integrated the results of the above two gray association calculated that the risk value. Finally, the paper selected the39coal listed companies in China in2010-2012data of financial risk evaluation model in M&A integration has carried on the preliminary validation.With the integration of the coal industry listed company M&A as the main body, and the adjustment of national industrial structure are inseparable integration features; For wide scope of coal industry consolidation, debt ratio is high, so the integration risk is bigger. Verification results show that:Based on coal enterprises M&A integration process, the coal industry, the financial risk has been increasing year by year. Further analysis showed that the main reason there is increased risk of corporate assets in the industry structure is irrational, excessive long-term assets and liabilities; integration strategy improper excess inventory; capital investment and cash flow problems; poor result in reduced operating income and inadequate attention to risk and so on.Through the research on the financial risk of M&A on coal enterprise integration, puts forward the following risk prevention measures:set up financial integration strategy; optimize the structure of financial integration of assets; establishing financial integrated early warning system and strengthening financial integration regulation.