Case Study On Cross-industry M&A Risk Prevention And Control Of ZHEJIANG SHANGFENG

With the development of the market economy and capital market,many enterprises in traditional industries diversify their business strategy through cross-industry M&A to find new economic growth points.However,it is necessary to identify and prevent risks in each step in cross-industry M&A activities.This thesis studies the risk prevention and control of cross-industry M&A by taking ZHEJIANG SHANGFENG as an example.This thesis helps to improve the research content of risk prevention and control of crossindustry M&A and provides some suggestions for the research on the cross-industry transformation of China’s traditional manufacturing industry.Based on the literature review of researches on M&A,this thesis also applies financial management principles and risk prevention and control theory.This thesis applies normative analysis and case analysis to probe into the risk prevention and control of cross-industry M&A.There are three main parts in the thesis: At the beginning is the theoretical analysis which includes literature review and fundamental issues of risk prevention and control of cross-industry M&A.The second part is a case study,which introduces the information and cross-industry M&A process of ZHEJIANG SHANGFENG and the target company.This part analyzes the existing cross-industry risks,and probe into the risk prevention and control strategies of ZHEJIANG SHANGFENG.The third part is countermeasure research,five suggestions on risk prevention and control of cross-industry M&A are drawn from the case study.In this thesis,some conclusions are drawn from the research of cross-industry M&A.The main aspects are as follows: cross-industry M&A should be in line with enterprise development strategy.Clear and feasible M&A strategic route should be formulated on the premise of clear long-term development strategic positioning;Target enterprises in crossindustry M&A should be carefully selected and evaluated,performance commitment should be prudently set based on the expected future earnings;It is essential to establish financial risk early warning mechanism during the process of cross-industry M&A.The ability of financial management is also a vital part to enhance enterprises’ risk management;Attention should also be paid to financial analysis and the mechanism of risk management and internal control,these factors can strengthen the risk response-ability of enterprises;Enterprises should choose appropriate and flexible financing channels and payment methods for cross-industry M&A.Facing the considerable risk of financing and payment,enterprises should choose reasonable funding and payment methods according to their actual situation to reduce the cost of cross-industry M&A and avoid financial risks;Post-merger integration also plays a significant role in cross-industry M&A.Enterprises should strengthen the integration both in corporate governance,financial organization structure,corporate culture and human resources.Furthermore,incentive and restraint mechanisms can also exert a positive influence on the post-merger integration.