Study On The Financial Risk Of SBS Acquiring Valuelink E-Commerce Company

Today,global competition is severe,many managers help enterprises transform and upgrade through M&A to obtain new profit growth points.According to wind,from 2016 to 2019,the number of China's M&A was 5,382,11,314,12,285,and 10,996.Through M&A,enterprises can quickly break through industry barriers to enter new industries,and also can obtain advanced technology and outstanding talents,thereby achieving the goal of rapidly increasing their market share and competitiveness,which is a good opportunity for the growth and development of Chinese enterprises.However,we should also notice that while M&A bring opportunities to enterprises they also bring risks to them.Many companies not only failed to realize their strategic intentions to expand their businesses through M&A,but also caused problems in their operations due to the large expenditure during M&A,and eventually led to financial crisis,which seriously influences the development of the company.Due to the complexity and uncertainty of M&A,the financial activities throughout M&A will inevitably bring M&A financial risks to enterprises.Studying the financial risks of M&A is of great significance for improving the efficiency of M&A.SBS is a leading enterprise in China's zipper industry.In 2017,due to the continuous rise in domestic labor costs and raw material prices,the price competition in the zipper industry has become increasingly fierce,and the company's zipper business is facing challenges.At the same time,because cross-border e-commerce can shorten the distance with foreign consumers,which is conducive to the implementation of national strategies such as the “Belt and Road”,the country has issued a series of policies to support the development of the cross-border e-commerce industry.In this context,in September 2017,SBS completed the acquisition of 65% stake in the cross-border e-commerce export enterprise Valuelink in order to expand the company's business and seek new profit points.However,a large amount of losses occurred in the Valuelink in 2018,and SBS accrued large amounts of goodwill impairment provisions.This caused SBS's first loss since listing,and the company's development was severely hit.There are many M&A financial risks in the process of the acquisition of SBS,which result in the failure of the acquisition target.Analysis of them can provide reference for other companies to prevent M&A financial risks.In this paper,SBS acquiring Valuelink is taken as a case study object to explore the financial risks of M&A.By reading the domestic and foreign literature and using the method of induction and summarization,the key points of the case study are combed,and the analysis framework of this article is constructed.This article analyzes the entire M&A case through six chapters.The first chapter is an introduction.This part first introduces the status quo of M&A in traditional industries in China and the significance of exploring the case of SBS acquiring Valuelink.Then it combs the research results of scholars on the definition,types and prevention of M&A financial risks.Finally,it clarifies the analysis logic and research framework of this article.The second chapter elaborates the definition,types,influencing factors of M&A financial risk and the theoretical basis for the study of this case.The third chapter introduces the basic situation of the participants in this M&A,the design of the M&A plan,and the performance of SBS after the merger.The fourth chapter analyze the financial risks involved in this M&A with financial index ratio analysis method and the trend analysis method.Chapter 5 analyzes the causes of various financial risks in this M&A case,which is helpful for the following suggestions to prevent financial risks in M&A.The sixth chapter is based on the previous chapters and proposes measures to strengthen the financial risk prevention of corporate M&A,providing some inspiration for other companies to carry out similar activities.This article mainly uses case study method and literature study method for analysis.By studying domestic and foreign literatures on financial risk in M&A,and summarized then from the definition,types,and influencing factors,and it provides a theoretical foundation for the analysis.Then,taking SBS acquiring Valuelink as an example,by studying its background,the process and the results,analyze the financial risks and causes in this M&A.Based on case analysis,the conclusions of this paper are as follows: In the process of SBS acquiring Valuelink,there are insufficient risk considerations when evaluating the value of the acpuired company,Overcommitment to performance,financing methods and payment method are single and the lack of attention to the financial integration after the merger have made evaluation risk,financing risk,payment risk,and financial integration risk,resulting in the first loss since the listing of SBS after M&A.Finally,based on the case study,this article proposes financial risk prevention measures for corporate M&A from four aspects: corporate value assessment,financing arrangements,payment method selection,and post-merger financial integration,which provides a reference for other companies to prevent financial risks in M&A.