Hansen Pharmaceutical Risk Management In M&A Financing

Mergers and acquisitions is an effective means to conduct assets reorganizationand optimize the allocation resources in the modern marketing circumstance. Thanksto a growing M&A, the industrial structure and business organization structure havebeen continuously optimized in the economic development of developed countries. Itis a trend and remarkable phenomenon for M&A to be increasingly active in theChina’s economic field. Many enterprises become the industry leader through M&Ato grow in strength. Yet, from the history of M&A, not all the cases are successfuland failure cases are far from rare. Various factors contribute to the failure of M&A,and financing risk is one of important and indispensable factors. The M&A ofZhongda Wuma Pharmaceutical Co., Ltd. by Hansen is successful in terms of productintegration which increased Hansen’s own competitiveness in the market. However,constrained by the background and the various other conditions then, the M&Afinancing arrangements had put great pressure on the management later on, and therisk formed by the M&A had dragged Hansen into a very tense capital chain.This thesis, from an introduction to various theories on M&A, especially theproblems of M&A financing risk, analyses the financing risk during the M&Aprocess of Hansen Pharmacy and reasons produced by M&A financing risk, targetingat the study on financing problems of buying Zhongda Wuma Pharmaceutical Co., Ltd.by Hansen. Meanwhile, it systematically elaborates and estimates the adverse effectson enterprises in M&A financing risk. That focusing on management strategies andimplement designs of M&A financing risk by Hansen Pharmacy is discussed in detail.It also points out that enterprises should determine reasonable financing deposits andproportion structure and choose appropriate M&A paying means and financingchannels. Uniting the example of cases, it submits plans and specific measures todefuse financing risk with a series of assorted measures, including developing ourcapital market system further, establishing bank loan system to support M&A，cultivating a M&A financing agency system with investment banks as its principalbody and encouraging innovating financing instruments. Enterprises should establisha thorough M&A financing system of risk management, and make financialintegration, which aims to improve managerial and administrative expertise andreinforce profitability. If possible, they could consider external intermediary to design an Initial Public Offer.In a word, on the basis of a concrete analysis about M&A financing risk byHansen Pharmacy, this paper puts forward a set of comprehensive strategies and plansto manage, control and defuse M&A financing risk, which is available for domesticenterprises controlling and defusing M&A financing risk.