Analysis And Prevention Of Financial Risk Of M & A Of State-owned Enterprises

State-owned enterprises play an important role in the national economy.The industries of a part of the state-owned enterprises are closely related to the national economy and the people's livelihood,and at the same time those enterprises can achieve good economic benefits by virtue of the control of national resources and the monopoly position in market.However,some of the municipal state-owned enterprises mainly concentrate on the service industry,steel and mining industry and so on.With the increasingly fierce market competition and the continuous adjustment of structures of state-owned enterprises,the industries of many municipal state-owned enterprises are sunset industries.Due to multiple causes of inside and outside,some state-owned enterprises of non-monopoly industries are faced with many problems,such as high debt ratio,low market share,lack of research ability,shortage of funds,high cost of business,management confusion,fail implementation of policies,ect..Mergers and acquisitions is a powerful measure that is helpful for state-owned enterprises to get out of the troubles and occupy the market to improve their competitiveness under the condition that the government calls for the state-owned enterprises to make a mixed reform and integration.But mergers and acquisitions is not a panacea for state-owned enterprises in bad operating condition,and blind mergers and acquisitions may cause a range of risks to state-owned enterprises.Not only the pricing,financing,payment and other aspects of mergers and acquisitions may lead to the financial risk of the merging side,but the unique political factors of the state-owned enterprises may also affect the mergers and acquisitions of them and thus cause financial risks,which is contrary to the original intention of mergers and acquisitions,and fail to achieve the desired effect of 1 +1> 2.This paper first summarizes the characteristics of state-owned enterprises,and then introduces the reasons and specific steps of mergers and acquisitions of state-owned enterprises.And then the paper defines the financial risk of mergers and acquisitions from theoretical aspect to provide a theoretical basis for later case study.Combined with specific cases,the next part conducts a comprehensive analysis of the current situation of both sides in mergers and acquisitions,and explores the feasibility of the transaction and factors that may cause financial risks.And then analyze the financial risk of each specific stage of mergers and acquisitions with qualitative andquantitative methods.Finally,the paper suggests some concrete measures to prevent the risks of mergers and acquisitions of state-owned enterprises,and provides reference for similar cases in the future.