Case Study On Financial Risk Control Of Emperor Ware's Merging Oceano

M & A is not only an important means to achieve business and scale expansion,but also one of the ways to achieve strategic transformation.As an important part of M & a risk,financial risk not only runs through the whole process of M & A,but also develops and changes constantly: the selection of target enterprises before M & A,the value evaluation,payment and financing in M & A,and the financial integration after M & A.The identification,evaluation and control of financial risk take place in all stages of M & A.enterprises need to constantly revise and adjust financial risk and its management,which is a major challenge for M & A parties.If the management of financial risk fails,it will not only cause the failure of M & A,but also cause the financial crisis and even bankruptcy of the enterprise.This article uses the case study method and comparative study method to study the case of Emperor Sanitary Ware's acquisition of Oceano.By analyzing the choice of the target company before the merger and acquisition,the evaluation and pricing of the value of Oceano,the arrangement of payment and financing methods in the merger,and the merger The financial integration will be carried out later to explore the financial risks of this kind of“snake swallow elephant” merger and acquisition,so as to further analyze and evaluate the financial risk prevention and control measures taken by Emperor Sanitary Ware.It is found that the merger and acquisition of emperor sanitary ware with Oceano is not only to deepen the company's business layout in the medium and high-end building materials sector,increase the value of the enterprise and enrich the profit growth point,but also because as a listed company,Emperor sanitary ware faces huge pressure and risk of performance decline in its first year of listing.Due to its high pollution industry,the changes of its industry characteristics,market operation environment and policies cannot be accurately estimated.There is uncertainty in this valuation,and there is valuation risk in M & A.Due to the small amount of its own liquidity,facing the huge cash transaction consideration of the acquisition plan,the enterprise can not rely on its own available funds to pay in full,and the lack of its own liquidity makes it face the payment risk.The financing plan of issuing shares to raise supporting funds alleviates the tense situation of the working capital of emperor sanitary ware.However,the essence of the financing plan is that most of the supporting funds are raised by Emperor sanitary ware from the three major shareholders of the company.The three major shareholders are also the actual controllers of the company.The three actual controllers obtain a large amount of cash through the pledge of equity,so the financing plan can be implemented smoothly.The major shareholders of listed companies take the company's stock as the pledge object,and the proportion of pledge is relatively high.The pledge behavior of individual shareholders indirectly makes the company's stock face the risk of value fluctuation and closing positions,and the company may also cause financial risks.As the holding subsidiary of emperor sanitary ware,the acquired company has an independent legal person status.Emperor sanitary ware has implemented light integration to the company.The management team,financial organization structure and financial management strategy of the company are relatively stable.How to achieve financial integration and avoid financial risks,there is still a lot of room for emperor sanitary ware.Combined with the case analysis,this paper puts forward the case enlightenment from the three perspectives of listed companies,small and medium shareholders,investors and regulators.For the listed companies,they should reasonably choose the payment method to reduce the risk of control transfer,optimize the financing structure to control the financing cost and financing risk,and prevent the financial risk caused by the equity pledge of the controlling shareholders.For small and medium-sized shareholders and investors,small and medium-sized shareholders should optimize the company's equity structure,establish and improve the equity restriction mechanism,and investors should strengthen investment risk management and prevention.In terms of securities supervision,we should further improve the information disclosure system of listed companies,enhance the effectiveness of third-party audit supervision,and guard against systematic risks caused by financing leverage.