Research On Mergers And Acquisitions Risk Of A Elevator Company

Recently, due to several serious elevator accidents, a series of laws and regulation were issued by government to encourage elevator manufacturers to take responsibility of maintaining elevator. At the mean time, the demand of new elevator is keeping decrease as the recession on real estate industry. In response to government regulations, elevator manufacturers are seeking to expend their business on elevator maintenance. After considering the specific of elevator maintenance industry, elevator manufacturers are taking mergers and acquisitions of local maintenance company as a way to expand business.Mergers and acquisitions is exact the investment form with high return and high risks, which is illustrated by a mess cases that failure investment lead to company has going concern problem. Due to uncertainty and information asymmetry of mergers and acquisitions, it makes a lot of mergers and acquisitions activities which start from good orientation, such as expand the market share, low cost expanding etc. ending with an unsatisfied result. The article analyze the mergers and acquisitions risks of K case of A company, to conclude the good points that A company did about risk control and also make proposal about which points need to be improved. Hopefully, it can play as a reference for the similar mergers and acquisitions cases in future.Firstly, the article introduces the topic background and research purpose and meaning, and also introduces related theories, then review relevant literatures. Secondly, it's introduce the detail about the case, including whole background and future trend of elevator industry, the backgrounds of A and K company, the motivation and strategy of the M&A. Thirdly, the article recognize and analyze the M&A risks of the cases. Then according to the recognized risks, it illustrated and evaluated the risk control undertaken by A company, and also make proposals on some areas which need to improve. At last, evaluate the research and point out weakness.Through analysis K case of A company, we found out that the risk control level directly affect if the mergers and acquisitions target can be achieved.