Financial Risk Evaluation On The Merger And Acquisition Of Guowang High-tech By Eastern Market

2018 was the third year of the implementation of the 13 th five-year plan and the year of the deepening of supply-side structural reform.China will continue to conduct structural reform to achieve the optimal allocation of resource factors.Under the background,the theme of “state-owned enterprise reform” stands out unquestionably,and the very rare mixed reform and backdoor case of the state-owned enterprise,namely,the merger and acquisition(M&A)of Guowang High-tech by Eastern Market emerges.It will become a model of enterprise M&A cases under the background of state-owned assets reform if it is successful.However,the neglect of the risks in M&A,especially financial risks is often the reason for the failure of M&A.Therefore,how to effectively identify,evaluate and prevent financial risks is of great significance for improving the success rate of the M&A.In the paper,with the financial risk of the M&A of Guowang High-tech by Eastern Market as the research object,the following contents are studied.Firstly,the relevant domestic and foreign literatures related to the financial risks of M&A are systematically reviewed throughliterature research method.Secondly,the background,motivation and process of the M&A of Guowang High-tech by Eastern Market are briefly stated with the method of case analysis.The financial risks in the process of the M&A are analyzed in stages.Besides,the financial risk evaluation model of the M&A is established by using the analytic hierarchy process and fuzzy comprehensive evaluation method.Moreover,the specific financial risks of the M&A are quantified by the analytic hierarchy process software.Thirdly,the corresponding control countermeasures and suggestions are put forward.Based on the above research,the following conclusions are reached:First of all,the enterprise M&A under the background of state-owned assets reform is full of financial risks at all stages.Based on the stages,the financial risks in the M&A can be divided into valuation risk at the preparation stage,financing payment risk at the implementation stage,and the integration risk at integration stage,and they include 13 secondary indexes specifically.Secondly,the overall financial risk of the M&A is low.The valuation risk that is the highest in the first-level index,and the impairment risk of goodwill that is the highest in the second-level index are worthy of attention.Thirdly,corresponding control countermeasures are given for the parts with greater financial risks in each link.To be specific,it is suggested to carefully investigate the assets of the target enterprise,pay more attention to off-balance sheet resources,and minimize the risk of goodwill impairment at the preparation stage of M&A;to select reasonable financing capital structure and cost,minimize the risk and cost of the whole M&A financing,and determine the appropriate share exchange ratio which can not only attract the target enterprise,but also avoid substantial dilution of equity at the implementation stage of M&A;to reduce the risk of financial integration through operation management integration,standardized financial integration and human resources integration at the integration stage of M&A.