Analysis on enterprise merger and acquisition risk

Abstract

Merger and acquisition is an important component part of capital operation activity, is important means for capital expansion of enterprise and effective mode of actualizing the most optimum distribution of resources. However, as a complicated capital operation activity, the merger and acquisition of enterprise also has great risk. The risk exists in all stages of merger and acquisition activity. In the process of executing merger and acquisition activity, we must control the risk in order to avoid the failure of enterprise merger and acquisition. To control the risk of merger and acquisition is mainly to identity and analyze in advance the risks which may take place in all stages of the enterprise merger and acquisition. In order to improve the quality of decision making and the control of risks in the process of enterprise merger and acquisition, we introduce the analytic hierarchy process (AHP) into decision making and risk control of enterprise merger and acquisition. The method endows different factors of risk with different weights, chooses the best enterprise merger and acquisition plan, reduces the number of risks which may take place to minimum, and improves the precaution and controllability of risks.