The main goal of M&A is to achieve synergy, including management synergy, business synergy and financial synergy. However, from the actual situation, synergy is just like agitation, which is very rare. The main reason for this situation is that M&A companies did not identify and control the risks in the process of M&A.. These risks mainly include: (1) Information asymmetry risk The so-called information asymmetry risk refers to the uncertain factors brought by the serious inequality between the company's understanding of the acquirer and the shareholders and management of the target company in the process of mergers and acquisitions. Due to the existence of information asymmetry and moral hazard, it is easy for the acquired company to hide unfavorable information from the acquirer or even fabricate favorable information in order to obtain more benefits. As a comprehensive system composed of multiple production factors and multiple relationships, the company is extremely complex, and it is difficult for the acquirer to fully understand and distinguish the authenticity one by one in a relatively short period of time. Some M&A activities may lack a thorough understanding of the profitability, asset quality (such as the availability of tangible assets, the authenticity of intangible assets, the validity of creditor's rights) and contingencies of the merged object in advance, and fail to find hidden debts, litigation disputes, potential problems of assets and other key situations, so they fall into the trap after implementation. (II) Financial Risk of Capital There is almost huge financial support behind every M&A activity, so it is difficult for the company to fully use its own funds to complete the M&A process. It is very important to form enough cash inflow in time to repay the borrowed funds and meet the needs of the company for a series of integration work after the merger. Specifically, financial risks mainly come from several aspects: the uncertainty and diversity of financing methods, the high growth of financing costs, and the variability of foreign exchange rates. Therefore, the risks brought by financing cannot be ignored. (1) Risk of integrity of financial information Because financial information belongs to the target company, the old shareholders often worry about the "unfavorable" factors contained in the financial information, and often conceal or even destroy some financial information, resulting in incomplete financial information and financial files, which may cause the target company to be punished. (2) Audit report and notes to financial statements Risk audit report is a third-party review of the company's financial matters, which often reveals some risk matters, while the notes to financial statements are usually financial matters that need attention, and these information, especially the reserved opinions and emphasized matters, will include the financial defects information of the target company. (3) Determination of Profit Attribution If a listed company is involved in the M&A transaction, there is a problem of defining the profit attribution node, and this attribution agreement is related to the performance of the listed company. (4) Post-event risk Because M&A transactions will last for a period of time, and the target company can't stop its operations and wait for the completion of the merger, the audit report and evaluation report based on which both parties trade are based on a tentative base date, and the duration from the base date to the actual delivery date is uncertain. How to adjust the events that happened during this period and how to bear or enjoy the operating profit and loss need to be clarified. (5) Payment of price risk The payment of the transaction price needs to be arranged reasonably according to the specific transaction structure, and both the corresponding node control and the corresponding risk control should be considered, and the balance must be paid after a certain period of time after the transaction is completed to prevent the release of risks after delivery and handover.

Legal basis:

Article 465 of the Civil Code of the People's Republic of China

A lawfully formed contract is protected by law. A legally established contract is legally binding only on the parties, except as otherwise provided by law.

article 466 if the parties have disputes over the understanding of the terms of the contract, they shall determine the meaning of the disputed terms in accordance with the provisions of the first paragraph of article 142 of this law. Where a contract text is concluded in two or more languages and the agreement is equally authentic, the words and expressions used in each text are presumed to have the same meaning. If the words and expressions used in each text are inconsistent, they shall be interpreted according to the relevant terms, nature, purpose and principle of good faith of the contract.

article 467 for contracts not expressly provided for in this law or other laws, the provisions of the general principles in this part shall apply, and the provisions of the most similar contracts in this part or other laws may be referred to. Chinese-foreign equity joint venture contracts, Chinese-foreign contractual joint venture contracts, and Chinese-foreign cooperative exploration and development contracts within the territory of the People's Republic of China shall be governed by the laws of the People's Republic of China.

article 468 for the creditor-debtor relationship not arising from the contract, the legal provisions concerning the creditor-debtor relationship shall apply; Where there are no provisions, the relevant provisions of this General Rules shall apply, except those that cannot be applied according to their nature.

article 52 a legally formed contract shall come into effect upon its formation, unless otherwise provided by law or agreed by the parties. In accordance with the provisions of laws and administrative regulations, if the contract should go through the formalities of approval, such provisions shall prevail. If the failure to go through the formalities of approval and so on affects the effectiveness of the contract, it will not affect the performance of the obligation clauses such as approval and the effectiveness of relevant clauses in the contract. If the party who should go through the formalities of applying for approval fails to perform his obligations, the other party may request him to bear the responsibility for violating the obligations. In accordance with the provisions of laws and administrative regulations, the provisions of the preceding paragraph shall apply to the modification, assignment and dissolution of the contract, which should be approved.