Study on Financial Risk and Countermeasures in Enterprise Mergers and Acquisitions--Take LVMH’s Acquisition of Tiffany as an Example

School of Economics and Business Administration, Beijing Normal University, Beijing, 100875, China

^* Corresponding author: 202111998360@mail.bnu.edu.com

Abstract

M&A is an important approach for enterprises to achieve industrial upgrading and scale effect, reduce operating costs, and promote the diversified development of enterprises. The financial risks that often appear in the process of M&A are the key to the success of M&A and the reorganization of enterprises. Existing equity and economic problems make enterprises easily fall into financial disputes and cause huge losses. Investment and mergers are important ways for enterprises to expand scale, enter new markets, and acquire new technologies or mature brands. Through investment and merger, market share can be increased, competitiveness can be enhanced, and the financial statements of enterprises can be enhanced, but risks in merger and acquisition are also accompanied. Through the case study of LVMH Group’s merger and acquisition of Tiffany, this paper will analyze the financial risks and countermeasures in the merger and acquisition and extract feasible and effective measures from LVMH Group’s treatment methods to help both parties control the risks in the merger process and achieve the purpose of merger and acquisition.