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The financial problems of enterprise merger and acquisition.

Author: WangHuiJuan From: www.yourpaper.net Posted: 2010-06-01 03:39:15 Read:
Keywords:   the enterprise merger and acquisition; financial problems   ; countermeasure
Abstract: mergers and acquisitions as an enterprise behavior under the market economy, in the history of the development of the western developed countries 100 years of enduring, behind why there is a profound economic motive and driving force as well as the political, social and other aspects of.This paper tries to make an analysis on the financial problems in the enterprise merger and acquisition.
the reason of a, M & A analysis of
M & A has the following factors: one is the pursuit of high profits results.As a sector of the economy's capital centralization total have certain limits, all sectors of the economy profit level is different, the instinct of capital drives the monopoly capital make every attempt one of multiple sectors of the economy, with access to a wider range of monopoly profits, or to accumulate more capital to seek higher profits; two is to reduce the risk, reduce the loss due to the crisis.The economic crisis is different degree of impact on all sectors of the economy, all sectors of the economy during the crisis of the profit margins are also different.Even in non - during the crisis, the economic sector business risk is also different among different.Therefore, take a multi-sectoral approach business diversification, can reduce the business risk to a certain extent, ease the crisis loss.
financial problems, and to help enterprises in two
(a) information asymmetry in the enterprise value evaluation is not accurate enough
in determining the target enterprise after acquisition of both, are most concerned about the problem than to continue operating point to reasonably estimate the value of the target enterprises and as the transaction price, which is the foundation of success.The target company valuation depends on the merger and acquisition of enterprises for the future free cash flow and time prediction.On the value assessment of the target enterprise may be due to improper prediction is not accurate enough, value assessment depends on M & A enterprises use information quality, information quality and depends on the following factors: the target enterprise is a listing Corporation or non-listed company; merger goodwill or malicious mergers and acquisitions is ready to mergers and acquisitions; time; target enterprise audit distance acquisition time the length of such.Because the audit report submitted to the accounting firm water more, the listing Corporation information disclosure is not sufficient, the serious information asymmetry makes the enterprise merger of the target enterprise value of the assets and the profitability of the judgment difficult to achieve very accurate, in the pricing may accept Gao Yumu standard enterprise value of the purchase price and lead to mergers and acquisitions of enterprises pay more money or more equity transactions.
(two) enterprise merger takes liquidity enterprises large lead to liquidity asset reduction
after the enterprise merger and acquisition may be due to the heavy debt burden is the lack of short-term financing, led to the emergence of payment difficulties.When the cash acquisition to take enterprise, enterprise is the first to consider the liquidity of assets, current assets and current assets of higher quality, liquidity is more strong, more enterprises can smoothly, quickly obtain funds.At the same time that the M & A activities occupied resources flow of business, thereby reducing the rapid response to external environment change of the enterprise and adjust ability, increased the operating risk of an enterprise.If freedom is not much money, enterprises must take the way, usually the target enterprise assets and liabilities rate, so that after the merger of enterprises debt ratio and the long-term debt has increased to a great extent, the security of the assets to reduce, if M & A financing ability is poor, cash flow is arranged properly, the liquidity ratio will decreased greatly, affect the short-term solvency, the merging party weakened liquidity.
(three) merger and acquisition of enterprises need to raise substantial funds, financing difficulties to enterprises
in the process of mergers and acquisitions, enterprises need to raise funds in full and on time, guarantee to merge smoothly, M & a need for capital decide the enterprise must consider various financing channels.If the merger is to hold for the time being, to stay after the appropriate transformation to sell, it requires people to vote a few short-term funds to achieve the objective of disc.This is a short-term borrowing can choose a lower cost of capital, but the debt service burden is heavy, if the enterprise which is arranged properly, will fall into the financial crisis.
three, to solve the enterprise and financial strategies of two
(a) improving the situation of asymmetric information, adopting the appropriate acquisition valuation model, reasonably determine the value of the Target Corp
two sides of M & a information asymmetry is the fundamental cause of the target enterprise evaluation risk, so the merger should try to avoid hostile takeover, review and evaluation of the target enterprise in M & A in front of.Mergers and acquisitions can be hired investment bank according to the development strategy of the enterprise comprehensive planning, comprehensive analysis and validation of target enterprise of the target company's industry environment, financial situation and management ability, so as to make a reasonable forecast of the future free cash flow target enterprise.Real value on the basis of the valuation is relatively close to the target enterprise.At the same time, using the value evaluation method of assessing different may be different for the same target enterprise merger price.Company according to the motive of mergers and acquisitions, mergers and acquisitions of Target Corp after the continued existence and grasp the information fully and reasonable evaluation to decide the Target Corp approach, a reasonable assessment of the enterprise value.
(two) the reasonable arrangement of funds payment, time and quantity. Reduce the cost of financing
the financing mode and size and M & A by way of payment, and the payment is cash, stock and mixed payment of three, the cash payment financing pressure maximum.The enterprises can combine their available resource flow, earnings, stock price instability, equity structure, the target enterprise tax financing situation of payment structure design, the mode of payment arrangements into cash, debt and stock of various combination mode, in order to meet the need for both the acquisition.For example, public takeover by two layer mode of payment, the first layer of offer, promise to pay cash to shareholders, second layers of the bid is marked with equivalent hybrid securities payment.With this payment method, a large scale, the buyer for the transaction account cash payment ability is limited, should maintain a reasonable capital structure, reduce the enormous pressure owing on the loan after the purchase, on the other hand is to lure the target enterprise shareholders to promise to sell, so that the merging party reached in the first layer of the bid target enterprise control rights for the purpose of.
(three) to strengthen risk prevention of acquirer and the government, the enterprise, the cooperation between banks, evasion of bank debt to prevent
1 hire intermediary institutions to the authority of the comprehensive audit of the Target Corp.Do not use bearing debt acquisition of Target Corp, but take the form of joint ventures, so you can avoid taking Target Corp or debt.
2 for evasion of bank debt problems arise in mergers and acquisitions, requires local governments to proceed from the overall situation, in strict accordance with the national law of M & a bank debt.Banks should deal with the relationship between the local government and enterprises, the maintenance of bank interest by means of law, for the government to encourage enterprises to evasion of bank debts through mergers and acquisitions, bank in this area can be set to high risk areas, to stop the region enterprise loan.
3 M & a information disclosure behavior.From China's actual situation, the backdoor listing of the case, the vast majority are belong to the acquisition of state shares or corporate shares, because this company is special, it is often the holdings of major shareholders of listing Corporation, transfer behavior of large shareholders has a great influence on the company.Therefore, a major shareholder in the opened negotiations equity transfer agreement, have the obligation to disclose to investors the process.Backdoor hearsay appears on the market, the stock price changes occur, the board of directors of the listing Corporation have the obligation to the major shareholder of the query has no intention of the reorganization.
4 combat insider trading in mergers and acquisitions.Insider trading is hazardous to the stock market is very big, should be the strict supervision of insider trading, the main methods are: strengthen legislation, perfecting the legislation system as soon as possible, to strictly define the insider and the scope of insider information; to strengthen the construction of supervision mechanism, improve the regulatory means, give regulators the power to strengthen moral education; occupation of the securities practitioners.
(four
) resolve the financial problem of M & A
1 to establish the system of value evaluation.On the domestic listing Corporation, intermediary institutions in the process of providing financial advisory services, should use the different value assessment method for evaluation, intermediary institutions must strengthen the ability and experience in this field, and familiar with the use of net present value method.
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