Financial Risk Analysis And Prevention And Control Strategy Of High Premium M & A

National development and social progress promote the development of business,but mergers and acquisitions can strengthen the growing of companies in the short term,companies plan to merge increasingly in order to achieve rapid development or strategic transformation.However,in recent years,the phenomenon of high-premium mergers and acquisitions occurred frequently,and the situation of high-premium mergers and acquisitions became more and more common,and the risks brought by them were also constantly revealed.In the process of high premium merger and acquisition,excessive premium payment will often make the acquirer incur high financial burden,and after the merger and acquisition,the actual performance of many companies cannot reach the promised value.From the perspective of research literature at home and abroad,scholars for high premium m&a research is mainly focused on the effects of premium m&a huge goodwill and "sequela",for the premium the causes and the research and analysis on the risk prevention and control of mergers and acquisitions,especially with typical cases of risk analysis and control research is less.Based on this,this paper selects the event of High premium acquisition of Kai xin Co.,Ltd by Sunwin Intelligent Co.Ltd,and carries out a specific analysis of the financial risks in the process of acquisition.First of all,introducing the M&A event,including the two companies circumstances and the time to event.Analyzing the intention of this event and using Event Study method to observe the market responses.Then,based on the ego hypothesis and social learning theory looking for the causes of high premium.After that,it analyzes the financial risks in the whole process of M&A from the valuation hazard,the financing defraying hazard,the performance commitment not reaching the goal,the goodwill impairment hazard and the concordance hazard.Finally,from the relevant financial data before and after the M&A of Sunwin Intelligent Co.,Ltd from2015 to 2020,we understand the changes of its profitability,operation,debt repayment and growth ability,and use the F-score model to measure the overall financial risk.The whole article analyzes the financial risks of high-premium M&A from horizontal and vertical dimensions respectively.Based on the above analysis,it is found that the main financial risks of The high premium acquisition of Kai xin Co.,Ltd by Sunwin Intelligent Co.,Ltd are as follows:firstly,the overvaluation of the underlying assets.Secondly,the control rights of the dilution customacy stock.Thirdly,if Kai xin Co.,Ltd cannot reach the target profits there is some financial risk.Fourthly,this event cause integration risk too.Therefore,the thesis believes that although the acquisition of intelligent enterprises in a short period of time to achieve the expansion of enterprise scale and profitability growth,but the acquisition of nearly 16 times premium will lead to critical risks and hinder strategies probably.Controlling risk needs in-depth discussion and research.In order to prevent the financial risks arising from the merger and acquisition with high overflows,it is suggested that Sunwin intelligent Co.should select the target enterprise according to the company’s development strategy,rationally size up the value of the company has been taken over,try to choose majorization financing defraying method,carry out the integration of financial 、operational 、culture and human resource strategies,and improve the design of the betting agreement.