The Financial Synergy Effect In M & A Study Of Iron And Steel Enterprises Of Listed Companies

Western countries has experienced a total of five times large wave of mergers and acquisitions, represented by the fifth merger wave in the late 1990s, which scale and influence are huge. In fact, none of the previous wave can match with the fifth merger wave. Now China's economy has entered a new period of rapid development, so has China's steel industry. Iron and steel enterprises want to through mergers and restructuring, in order to promote the development of iron and steel enterprises, and increasing industrial concentration is an important way to solve the above problem, and has been a national industrial policy to encourage and guide the development. In early 2009 the State Council promulgated the " the restructuring and revitalization plan of iron and steel industry", which requires the backbone of the enterprise to implement mergers, restructuring, enlarge group size, and increase industrial concentration to get comparative advantage; it is required that, by 2010, Chinese top five steel companies production capacity accounts for more than 45% the of production, and top 10 domestic steel enterprise groups accounts for more than 50% of steel production, and accounts for more than 70% by 2020. We can see that study on the steel industry mergers and acquisitions of listed companies, is consistent with not only M & A trend in the world, but also the requirements of the times in China.This paper consists of six parts, focusing on the theoretical and empirical research of financial synergy effect of Chinese iron and steel enterprises of listed companies. The content of this paper is that: in the first part, it is about literature review of theory and research for the financial status of financial synergies of the domestic and international mergers and acquisitions; in the second part, In this paper, financial synergy in mergers and acquisitions is made a detailed interpretation and carried out a measurement of financial synergy method; this part also analyses trends of mergers and acquisitions of steel industry in the world; in the third part, in this paper, the Chinese steel industry capacity and layout, the status of mergers and acquisitions as well as the characteristics of mergers and acquisitions of steel companies and the industrial distribution after M & A are detailed analyzed; in the fourth part,. comprehensive evaluation model of Xu Guohua etc , which include the following financial indicators: profitability, solvency, development, management capacity and capital expansion capability, is operated in order to conducted financial synergy in empirical research and analysis the of Chinese steel industry mergers and acquisitions of listed companies, and to make evaluations to determine success and failure of mergers and acquisitions; in the fifth part of the paper, through empirical research method, iron and steel enterprises in China's financial market effects of synergy reflected in the vertical and horizontal analysis of Chinese steel companies to explore in depth the financial synergies; in the sixth part, based on the listed companies in Chinese steel enterprises synergy evaluation and analysis, based on the financial synergy conclusion of iron and steel enterprises of listed companiesin China, combined with above theoretical and empirical analysis, this part pointes out the prospects for Chinese steel industry mergers and acquisitions of listed companies in the future.