Analysis of Financial Risk Prevention in Mergers and Acquisitions

Abstract

Mergers and Acquisitions are considered to be a very effective method for improving enterprise management modes, expanding enterprise scale, and adjusting industrial structure. This method has prevailed in every walk of life all over the world Affected by many factors, enterprise mergers and acquisitions have had a late start in China. The complex and fast-changing environment makes enterprise mergers and acquisitions a substantial risk. In particular, there is serious financial risk filled in every step of the mergers and acquisition process. There are a variety of financial risks involved in mergers and acquisitions, and if these risks are not effectively addressed and controlled, they will cause failure at any time. Therefore, nowadays many scholars and entrepreneurs consider the financial risks of mergers and acquisitions to be the most considerable problem.. This paper will propose effective precautionary measures for the financial risks associated with mergers and acquisitions, measures that reduce the impact resulting from financial risks, increase the opportunity of success for mergers and acquisitions, and insure the implementation of enterprise mergers and acquisitions.
Key words: Mergers and acquisitions; Financial risk; Causation; Prevention