Abstract
In this paper, the financial risk of Ping An Insurance (Group) Company of China, Ltd. acquisition of Shanghai Jahwa United Co., Ltd is divided into the target enterprise risk assessment risk, financing risk and uncertainty of future earnings according to M & A links. The study finds that the target enterprise value assessment under market approach is close to the transaction price; the financing risk can be divided into long-term risk and short-term risk; Uncertainty of future earnings arises from the volatility of the stock price caused by the uncertainty of the target enterprise. To reduce these three risks, this study suggests that M & A companies adopt a variety of methods to comprehensively assess the value of the target enterprise, rationally design the financing plan and pay close attention to the target business operation.
Highlights
Compared with the strategic acquisition, the financial acquisition does not involve the later part of the business integration, that is, the two sides remain independent, and the financial risk is relatively easy to measure, so this study selected financial acquisition for case analysis
The financial risk of Ping An Insurance (Group) Company of China, Ltd. acquisition of Shanghai Jahwa United Co., Ltd is divided into the target enterprise risk assessment risk, financing risk and uncertainty of future earnings according to M & A links
The study finds that the target enterprise value assessment under market approach is close to the transaction price; the financing risk can be divided into long-term risk and short-term risk; Uncertainty of future earnings arises from the volatility of the stock price caused by the uncertainty of the target enterprise
Summary
Compared with the strategic acquisition, the financial acquisition does not involve the later part of the business integration, that is, the two sides remain independent, and the financial risk is relatively easy to measure, so this study selected financial acquisition for case analysis. How to measure the financial risk involved in mergers and acquisitions? The contribution of this research lies in the exact calculation of the financial risk involved in mergers and acquisitions through the specific case data, which is the practice of M & A financial risk research, and provides a new way for the financial risk measurement. The third part is the case study of Ping An acquisition of Shanghai and specific financial risk analysis; the fourth part is the conclusion and recommendations
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