The Synergy Effect Study Of M&a On Company LS & Y

Merger and acquisition activity of enterprise can be reallocation of market resources, and an important way for enterprises to expand their scale.The leading international enterprises,which offers whole life cycle management of the documents,improve the market competitiveness through its own development and foreign mergers and acquisitions to expand their scale.In this environment,LS company,as leading solutions and services provider in our local output link of office information system life cycle,begin to merge other company,and achieve to offer the service about full life cycle of file through the acquisition of electronic imaging solutions provider Y.Synergistic effect is the motivation of M & A activity’s occurrence,as well as the ultimate goal of M & A activity.Throughout the domestic and foreign history of enterprises M & A,the results are not optimistic,and there are a large number of mergers and acquisitions ended in failure.Many of these cases in the M & A activity pursued diversification or development in a hot industry,backdoor listing and non substantive restructuring blindly.The reason of their failure,is that the enterprises ignore the prior assessment before the merger and the importance of overall integration after the merger,leading to the lack of synergy or the limited synergy after M & A.Therefore,the correct choice of target enterprises,and the good recognition to producing synergistic effect with the acquirer,is an important part in the success of M & A.Through the recognition,the synergy after M & A is estimated to measure whether the recognition achieve the desired results.The research object of this paper is LS’s acquisition of Y company.In order to analyze whether this M & A produce synergies,at first the "value chain analysis" and the Boston matrix are used to recognize the complementary effect on the advantages and disadvantages of resource about the both side of M & A,then the accounting index method and discounted cash flow model of M & A activity are used to test synergy.In the analysis process of the accounting index method,the trend of the accounting index is used to evaluate the synergistic effect;at the same time,in the process of analysis to the accounting index changing trend,this paper makes a specific description of the good synergistic effect of both sides acquired in M &A.The discounted cash flow model is used to estimate the expected future cash flow according the financial data before and after the M & A,and estimate the intrinsic value of LS company.Through the estimates,the intrinsic value of LS’s increases after acquisition of Y.Finally,this paper offers case revelation to the subsequent acquisitions,that attention should be paid to the selection of target company,and to comprehensive integration after M & A.This paper also offers conclusion that LS’s acquisition of Y will produce a synergistic effect,because of good recognition to the complementary resources of both sides.LS company should pay attention to the effective integration after M & A.