Research On Value Creation Of M&A

According to related statistics, since2006, M&A has become a major force of China’s economic structural adjustment and optimal allocation of resources. It plays a great role in the development of Chinese enterprises. However, the acquisition is not easy. A lot of mergers and acquisitions are often to fail in the end. How to make a merger to create value for the enterprise is a problem that all mergers and acquisitions are facing. M&A value creation in past studies mainly focus on if M&A activity is to create value; a part of acquisition activities, such as acquisitions preparation acquisition integration; the factors that have effects on to do acquisitions value creation. Research on the value creation is not much. In this paper, the author take Midea Group Group as an example who acquired Roysltar and Hualing in2004,acquired Little Swan in2008and finished it’s integration in the late of2010. It focuses on finding out Midea Group Group’s value creation mechanism through acquisitions. Thus it can enrich the acquisition’value creation theory and provide a reference for future mergers and acquisitions.Based on reading a large number of documents and collecting the interrelated materials through various measures, the thesis intends to discuss the mechanism of value creation from M&A (merger and acquisition) about the Midea Group. The thesis proposes the key parts of realizing value creation from enterprise M&A consisting in locating on target enterprises accurately, controlling procurement prices reasonably and conforming target enterprises effectually.On the opening of the thesis, some previous study results on the value creation from M&A and related theories on value creation and M&A are introduced as theoretical foundation for the latter case study. In chapter three, the industry background of household appliance and the M&A activities about the Midea Group are described to offer an objective fact for the case study.In chapter four which is the uppermost important part of the whole thesis, it is found help to merge or acquire successfully that value the three sections on M&A and the factors in M&A, with acquiring synergistic effect and the value to the enterprises. On the basis of the study, the mechanism of value creation from M&A about the Midea Group has been concluded. Specifically, it is introduced that motivation of the M&A activities about the Midea Group, the effective M&A and the results of value creation from M&A. Afterwards, the thesis emphasizes the key parts of realizing value creation from enterprise M&A consisting in locating on target enterprises accurately, controlling procurement prices reasonably and conforming target enterprises effectually. In the process of locating on target enterprises, it is must to be considered not only to survey conscientiously and adequately, but also to take the enterprise evaluation within enterprise strategy factors. Finally, on the basis of the whole study, the thesis suggests the mechanism of value creation from M&A and the diagram of the mechanism of value creation on the Midea Group.The final chapter is the conclusion and the preview. In this part, the thesis puts forward the results of the researches and makes an explanation on the future research.