Performance Study Of Public Corporate’s Mergers&Acquisition In China’s Media

Mergers&acquisitions is an aggressive corporate development strategy through capitaloperations. This strategy greatly contributes to enterprise resource optimization, scale economic, marketshares rise, cost control, and risk diversification. Mergers&acquisitions performance is an important indexto measure the quality of mergers and acquisition. Through the analysis of the mergers&acquisitionsperformance, on the one hand, can reflect the completion of mergers&acquisitions activities, on the otherhand can reflect the effects of mergers&acquisitions of enterprise value.In digital age, the media industry has been heavily impacted by new media, a combination ofdeveloped digital, communication and media technique. Traditional media corporate are losing theircompetition advantages, and are facing increasing pressure of company transformation. From the politicalaspect, the government encourage traditional media corporate to break area blocks and industry barriersthrough merger and acquisition. Publication companies are supported to reorganize ascomprehensive mediagroups cross area, industry and ownership. In this context, China media industry has experienced a hightide of enterprise merger&acquisition. However, the outcomes are still questioned whether these activitieswould reach the expectation.This dissertation firstly introduces the concept, categories, motivations and three evaluationapproaches (market performance evaluation, performance evaluation of accounting, economic value addedapproach) of merger and acquisition. Media industry in China is then analyzed in three aspect, industrycharacteristics, current situation, and the motivations in depth. The third part of this dissertation focuses ona case study of B-ray media acquiring Chengdu DreamWorks, based on a combination of event study andeconomic value added approach. By calculating the cumulative abnormal return of B-ray,we can measurethe impact on share prices in the merger&acquisition,and then we can know the short-term performance ofthe event In the calculation of long-term performance, in order to ensure the accuracy of EVA calculation,the author combines the actual conditions of B-ray, in the disclosure of financial statements on the basis ofthe accounting adjustment, then to calculate EVA, measuring B-ray’s long-term performance after themerger, found that the net profit and EVA keep increase after the merger, through the evaluation of performance of B-ray Media, the author thinks that, this case is successful. As the consequence, B-rayMedia successfully entered into online game industry, and established new media development platform.The corporate also built a well foundation for further industry optimization and development through thismerger&acquisition. As we knows,three to five years after the merger&acquisition ia a process ofintergration, both sides of the merger&acquisition need to undertake all aspects of the fusion, in order toachieve the best state. Finally, this case indicates the importance of acquiring time, the payment method,company culture and human resource integration.