Study On Financial Risk Analysis And Control Of Merger And Acquisition Of Real Estate Enterprises

As is known to all,the real estate industry plays an unique contribution in boosting the economy,supplementing finance and providing employment.However,in recent years,China’s domestic economic growth is temporarily in a downward period,the escalation of international trade friction,coupled with the transformation of economic development mode,the promotion of financial market reform,social livelihood protection needs,the real estate industry control policies are increasingly increasing.Affected by this,the internal competition generated by the housing enterprises to obtain land resources,synergies and so on is also increasingly fierce,have to promote mergers and acquisitions become a popular choice for them to jump out of trouble.However,merger and acquisition is an activity with both opportunities and risks,which can greatly improve the economic benefits of enterprises and explore various development.Failure may cause the enterprise to suffer significant loss of property,reputation,or even bankruptcy.Thus,the financial risks of mergers and acquisitions can not be ignored.In addition,nowadays,the capital market enters the two-way opening stage due to the official implementation of Shanghai and Hong Kong Stock Connect,Shenzhen and Hong Kong Stock Connect,Shanghai and London Stock Connect.B-share market,this period achievement,quits the historical stage or seeks redemption must be the final result.Of course,the new reform will also bring new problems.For the B share market reform,the cross-market share exchange absorption merger of A and B shares,whether the scheme design is scientific and reasonable,whether the process risk is minimized,and other issues directly affect the result of the merger and even the subsequent development of the enterprise.Therefore,this paper takes Nanshan Holding,A real estate enterprise in the A-share market,and Shenzhen Base in the B-share market as the case study object,takes the status quo of the real estate industry and its merger and acquisition as the background,and combines the theories and literature of domestic and foreign scholars on the financial risks of merger and acquisition to analyze the conventional financial risks and the special financial risks of A and B share exchange generated by both parties in the process of merger and acquisition.Finally,control methods and conclusions are presented according to each risk dimension.The conclusion of this paper is that in terms of the financial risk of the merger,the merger mainly has the risk of information asymmetry due to the limitation of various statements of enterprises in the early stage and the difference between each other’s business fields.The target enterprise B of Shenzhen Base has poor debt,profit and operation conditions;Nanshan Holdings stock exchange to pay the premium risk of Shenzhen Base B high consideration;The valuation method choice risk when evaluating the enterprise value of deep base B.In the interim of the merger,when Nanshan Holdings pays,the debt repayment risk of the enterprise’s long-term and short-term debt burden increases,as well as the risk of dilution of Nanshan Holdings’ equity after the merger.In the later period of the merger,Nanshan Holdings’ integration risks of financial objectives,financial organizations and financial systems,and the Z-value model is used to analyze and conclude that the merger of Shenzhen Base B by the stock exchange of Nanshan Holdings increased the integration risks of the enterprise.In addition,in view of the special financial risks of "A+B" conversion to A,this paper believes that there are mainly exchange rate risks caused by the different currencies involved in the A and B share markets,risks related to the trading system and securities account,and foreign exchange risks for B-share investors at home and abroad.In terms of the financial risk control of the merger,due diligence should be proposed for the above risks to reduce the information gap;Appropriate selection of methods,reasonable valuation;We should insist on using equity payment and give small and medium shareholders cash option;To maintain control of the controlling shareholder’s control of payment risk control;We should cultivate the same enterprise goal and establish a unified financial management system.Build a reasonable organization and management system.