Research On The Risks Of Continuous High Premium M & A Of Listed Companies In China

M&A is an effective and extensional development path for enterprises to expand market share and improve their competitiveness and economic benefits.With the emergence of “mergers and acquisitions”,the frequency of mergers and acquisitions and the premium rate of mergers and acquisitions of many listed companies in China are rising.Therefore,the characteristics of continuous mergers and acquisitions and high-value mergers and acquisitions of Chinese enterprises have become increasingly prominent.However,continuous high-price mergers and acquisitions are like a“double-edged sword” for enterprises.While promoting the development of enterprises,they will also bring huge risks to the company in the subsequent daily operations and resource integration.Taking the M&A event of China's listed company Jinyi Culture from 2014 to 2017 as an example,this paper analyzes the company's motives behind the continuous high-price mergers and acquisitions under the already tight cash flow,and specifically generates the company's continuous high-value mergers and acquisitions.Strategic risk,financing risk,surviving risk and how to deal with these risks are discussed in depth.Therefore,the possible contribution of this paper is to theoretically propose and define the risk of continuous high premium M&A risk in M&A risk superposition phenomenon,and analyze the risk mechanism of continuous high premium M&A,how to deal with various aspects of implementing continuous high premium M&A.The key risk points propose scientific preventive measures,thus providing some forward-looking suggestions on how to prevent the risks of continuous high-value mergers and acquisitions when Chinese listed companies choose M&A strategies in practice.The research findings of this paper are as follows :(1)the sluggish industry environment and poor business management are the main motivations for listed companies in China to maintain stable and rapid growth of corporate performancethrough M&A at a high premium;(2)in the planning and decision-making stage,the strategic risks brought by successive M&A,such as hasty decision-making and improper selection of M&A targets,lead to the excessive premium rate paid by enterprises due to the selection of M&A targets in cross-border M&A and the unreasonable valuation of target enterprises;(3)in the transaction execution stage,the multiple consideration payments caused by successive mergers and acquisitions and the excessively high transaction price,large cash payment and high ratio of stock payment caused by the merger and acquisition strategy at a high premium result in higher financing and payment risks for enterprises due to the superposition of the two risks;(4)in the stage of operation and integration,the rising integration risks brought by short-term continuous mergers and acquisitions,as well as the high goodwill and goodwill impairment risks caused by mergers and acquisitions at a high premium,lay hidden dangers for the stock ownership and the transfer of control rights.