From leading textile enterprises to agricultural machinery carriers to the largest pharmaceutical group in China, Huayuan's integration in unfamiliar industrial fields has not improved. By 2000, Huayuan's textile output had jumped to the first place in the country, but there was no core competitiveness, no outstanding brand and no "singles champion". However, the agricultural machinery industry can not achieve the synergistic effect of integration, and the losses are serious. Huayuan finally withdrew from the whole line in May 2005. Huayuan entered Shanghai Pharmaceutical Group and Beijing Pharmaceutical Group, striving to realize the integration effect of textile and medicine. However, due to the decline of the textile sector, it is difficult to coordinate within the pharmaceutical sector, just "merging without merging", making mergers and acquisitions a mere formality. In addition, Huayuan's internal control is weak and financial integration has not been realized, which is mainly manifested in the following aspects: First, the financial power is relatively scattered, and the subsidiaries with independent legal person status have greater financial power, which is difficult for the group headquarters to control. Second, there is no effective financial director appointment system for each subsidiary, and the group headquarters cannot fully grasp the capital operation status of the subsidiaries. Third, the Group has not established a unified financial accounting system and financial reporting system. Fourth, the internal audit system of the group is weak, and there is no necessary internal audit process for subsidiaries. Fifth, the foundation of financial basic management, especially financial informatization, is very weak. Huayuan mainly relies on high bank loan investment externally, and cannot achieve the synergistic effect of management, finance and operation internally, and cannot obtain stable cash inflow. Operational and financial risks are increasing day by day, which eventually leads to the break of the capital chain and the collapse of the whole group. Three. Reflections on the merger and acquisition of Huayuan 1. The government should give necessary policy guidance and supervision to the merger and acquisition of state-owned enterprises. In the process of merger and expansion of Huayuan, the government departments did not give corresponding policy guidance and supervision except for the "green light" all the way. If the government can give key support to key central enterprises, but also pay attention to their risks and possible problems in mergers and acquisitions, and conduct more routine inspections, Huayuan's problems may be discovered earlier. Therefore, the government should strengthen the necessary policy guidance and supervision while supporting the merger and acquisition of state-owned enterprises. 2 M&A enterprises should correct the motivation of M&A. The failure of Huayuan M&A is largely due to blind M&A. Diversified investment management, as an important means to spread financial risks, can reduce the risk loss of enterprises. However, if diversified investment and management are carried out unrealistically, too many products or projects are involved, and the main business is not prominent, not only can the risk not be dispersed, but the enterprise will be in trouble. M&A enterprises should correct M&A motivation, base themselves on long-term development according to their own development strategy, consider scale effect from a rational level, implement strong alliance, optimize reorganization, and achieve the goal of complementing each other's advantages and improving core competitiveness. 3. Pay attention to the prevention and control of financial risks. From the financial point of view, the optimal adjustment of asset-liability structure and the reasonable matching of cash flow are the fundamental measures to resist liquidity risks and prevent financial crises. In the process of M&A financing, we should follow the requirements of optimizing the capital structure and arrange the ratio of debt to equity as much as possible according to the reasonable capital structure. On the basis of accurately predicting the future liquidity, rationally allocate the asset-liability structure; Long-term and short-term liabilities should be properly balanced, so that the enterprise funds can meet the needs of future cash flow, and there will be no large amount of funds deposited in the enterprise, which will reduce the efficiency of capital use. 4. Strengthening financial integration after enterprise merger and acquisition "merger and acquisition is not reorganized, listing is not integrated" is one of the important reasons for the failure of Huayuan merger and acquisition. The failure of Huayuan M&A shows that if we only pursue the superficial effect of M&A and ignore the financial integration of M&A, the "shortcut" may become a "dilemma"; Even with advanced technology and abundant capital, but lack of financial integration ability, it is still impossible to avoid the failure of mergers and acquisitions. Therefore, after the signing of M&A Agreement, M&A enterprises should carry out financial integration in a planned and step-by-step manner according to the prior planning arrangements. Different M&A enterprises have different financial integration frameworks, but in general, they can be summarized as "one center, three in place and seven integrations". A center is centered on maximizing enterprise value. Three in place, that is, the financial management of M&A's business activities, investment activities and financing activities is in place. Seven integrations include financial management objectives, financial system, accounting system, assets, performance appraisal system, cash flow internal control and debt integration. From the actual situation of M&A in China, in order to improve the success rate of M&A, enterprises must strengthen financial integration, and at the same time, formulate systematic integration planning and effective integration implementation plan; Strengthen communication, exchange and coordination between the acquirer and the acquired party, pay attention to personnel integration, mobilize the enthusiasm of the employees of the acquired party, prevent the loss of key personnel, and solve the contradictions between the employees of the acquirer and the acquired party; In addition, each enterprise has its own relatively stable corporate culture, and successful mergers and acquisitions must also take into account the integration of corporate cultures of both parties.