The Research On Effect Of South Cement Company Limited’s Mergers And Acquisitions

Currently, the cement industry in our country is commonly overcapacity, di fficultto eliminate the backward production capacity as well as the SME’s are too many andscattered. Many cement companies have rapidly carried out joint restructuring inorder to change industry structure and improve profit one after another. Although lotsof SME’s have gone bankrupt in this M&A because of their regardless of own strengthand blinding expansion, the seccuss example still exists, that’s the South CementCompany Limited. Researching the M&A of South Cement Company Limited has aguiding significance; it can point out the way and provide experience for other firms.Based on researching literature of domestic and abroad, summary the theory andmethod of mergers, adopt the case anaylsis, studies the big scale of mergers andacquisitions of South Cement Company Limited from2007, and then review thebackground, the motive and a series of acquisition steps of M&A of South Cement,discuss the effect on horizontal and vertical mergers and acquisitions of South Cementfrom the point of view of the enterprises itself and the industry, especially analyze theeffect on the enterprise cost, economic benefits and tax effect, the whole industrymarket share, industry concentration and the proportion of capacity could understandthe reason of positive effects of Southern Cement’s M&A in such a short period oftime as well as the critical factors of this success. At the same time, it can also findthe way to eliminate the negative effects; finally it can also make the forecast to thedevelopment trend of the cement industry in the future.It is necessary to discuss the efects of cement industry leading enterprisesSouthern Cement Limited acquisition in the industry situation, in order to provide areference for other acquisitions which are being implemented or planned in cementindustry, as they can draw on the experience of South Cement merger and acquisition,successful reference and so on, which can help them avoid disorientation in thecement industry mergers and acquisitions wave.