Research On The Financial Risk Of The Merger And Acquisition Of Gujia Home Furnishing

In recent years,domestic company M&A transactions have increased significantly.Statistics show that the total value of domestic company M&A transactions in 2018 was approximately 14.4 trillion yuan,and the total number of transactions was approximately 16,335.After analyzing these M&A transactions,we found that the overseas investment and M&A activities of state-owned enterprises have decreased in 2018.Instead,state-owned enterprises have shifted more of their business focus to the domestic market and internal restructuring;in the contrast,the magnitude of overseas investment activities of private enterprises surpassed that of state-owned enterprises for three consecutive years(about 2.5 times).Among the private enterprise M&A transactions in the A-share market in 2018,a series of large-scale domestic and foreign mergers and acquisitions carried out by Jason Furniture(Hangzhou)Co.,Ltd.(Kuka)are the most eye-catching.In the process of mergers and acquisitions,most private companies complete their mergers and acquisitions through their own debt and full cash payment transaction considerations.Such a transaction model,for private companies with a late start,weak foundation,and many shortcomings,will give the whole process of mergers and acquisitions.Brings greater financial risks.Therefore,how to accurately identify and prevent financial risks in mergers and acquisitions has become an urgent problem for private enterprises to solve in the practice of mergers and acquisitions,and it is also a hot topic in academic field analysis.Therefore,this article takes the case of Kuka as the research object,identifies the financial risks in the entire M&A activity,evaluates its risk response measures and effects,and finally proposes corresponding preventive measures.The article uses a combination of theoretical research and case analysis research methods,selects the mergers and acquisitions of Kuka in 2018 as the research object,summarizes the relevant research results at home and abroad,and summarizes the main financial risks in the mergers and acquisitions of private enterprises according to the mergers and acquisitions.The progress process is divided into the valuation risk in the early stage of the merger,the payment risk in the mid-stage of the merger and the debt repayment risk in the later stage of the merger.In the entire process of corporate mergers and acquisitions,most of the financial risks in the early stage come from the valuation of the assets of the acquired party;the financial risks in the medium term occur in the choice of the payment method of the transaction consideration;and in the later stage of the merger,because of the leveraged acquisition of debt The coming debt repayment risk is the main financial risk faced in the later stage.Through a case study,this article finds that Kuka has taken corresponding measures to deal with the financial risks that may exist in the above-mentioned merger and acquisition process:First,Kuka employs professional intermediaries to deal with the valuation risk of the acquired party’s assets;second,it uses forward Foreign exchange contracts are used to cope with the risk of outbound payment of funds brought about by exchange rate fluctuations;finally,Kuka uses multi-channel financing to reduce debt repayment risks in mergers and acquisitions.However,after further analysis of the relevant financial indicators after the completion of the Kuka acquisition,it is found that the financial indicators after the completion of the Kuka acquisition are not as good as before the acquisition,indicating that the overall effect of the merger is not satisfactory,and the financial risk response measures adopted by Kuka may exist A certain degree of defects.Through comparative studies of successful corporate M&A cases in Western countries,the article found that the unsatisfactory results of the mergers and acquisitions of private enterprises in my country may be due to the financial risk that the transaction consideration is too dependent on cash payment,and private enterprises in my country are practicing this financial risk China did not propose a better response.In response to this phenomenon,the article proposes that private companies in our country can give priority to the payment method of using stocks to pay for transaction considerations in the process of mergers and acquisitions.Compared with full cash payment,the use of this payment method eliminates the need for companies to bear greater debt financing pressure,while at the same time it can also deal with valuation risks and solve a series of problems caused by the outbound capital.Of course,the method of using stocks to pay transaction consideration is not perfect.The long time for approval of stock issuance,many procedures,and the difficulty of realizing the interests of the acquiree will all hinder stock payment.Therefore,from a comprehensive consideration,the "cash+stock"payment method can be used as a compromise between all-cash payment and all-stock payment for the consideration of mergers and acquisitions.The research conclusions of this article reveal the specific manifestations of financial risks in the process of mergers and acquisitions,and at the same time give certain suggestions on how private enterprises should deal with financial risks in mergers and acquisitions,and provide theoretical support and decision-making for private enterprises to prevent financial risks in mergers and acquisitions.At the same time,it can be used as a reference for deepening the reform of the capital market,and the practice of legislation and regulatory authorities to guide and regulate corporate mergers and acquisitions.