A Study Of Synergy Effect In Merger & Acquisition Of China's Steel Industry

Mergers and acquisitions is an important means to implement development strategies and increase their strength, has been nearly a hundred years of history. With the development of market economy and economic globalization, more and more M & A activities emergence. According to a variety of M & A cases of the World, the fundamental purpose of M & A is to obtain synergistic effects. But synergistic effect is still a vague concept, how to understand the synergies, assess the synergistic effect, and pursuit the synergies, have very important significance for the M & A activities of our enterprises. This paper summarized the theory at home and abroad, defined the concept of synergy, based on the theoretical to analysis the source of the synergy. In this paper, the acquired business is the object of study, by comparing a series of financial indicators before and after mergers and acquisitions, combining qualitative and quantitative research method, to assess whether the synergy achieved. In addition, with the development of China's steel industry, this paper analyzed the iron and steel enterprises in China have the necessity and feasibility to mergers and acquisitions. At the same time, through specific case of M & A, this paper from both theoretical and practical aspects to analysis and verification the synergies of mergers and acquisitions.This paper outlines the acquisition of existing domestic and foreign enterprises and the theory of synergy, then the status of domestic and international steel industry background leads a case. In the the process of the case, a brief introduction of the two companies with their own circumstances and advantages, the method of comparing financial indicators used to determine whether the mergers and acquisitions to achieve a synergistic effect, while taking advantage of regression analysis testing a integration factors, resulting case conclusions.This article attempts to reality in the background of China's steel industry, through case analysis, iron and steel enterprises in China to find out problems in mergers and acquisitions, such as M & A motives are not clear, just in response to policy or the pursuit of business expansion in the scale of mergers and acquisitions to take the blind, and after the acquisition of companies did not implement effective integration measures and so on. For these questions, this paper presents a number of recommendations in order to find practical solutions to make iron and steel enterprises in the merger synergies, the added value of enterprises, improve China's steel enterprises in international competitiveness.