Sunning Merger And Acquisition Caseanalysis Based On Financial Synergy

With the development of China’s economy, economic globalization has an increasing impact on China’s economy, and Chinese enterprise also gradually realizes its scale expansion by means of mergers and acquisitions(M&A). M&A is one of the important ways for enterprises to acquire efficient capital movement, and to promote enterprises scaling up and modern market economy stepping forward. Compared with self-relied accumulation, M&A has more advantages on time, and can quickly adapt to the demand of the market to enhance the competitiveness of enterprises.One important reason for the M&A in enterprises is to obtain financial synergy effect, which is a key factor in the process of the success of M&A. Financial synergy effect is to reduce capital through M&A and optimize the financial structure. It includes enhance the financial capacity, lower the cost of capital, legalize the reduced tax burden, increase the cash flow, reduce the cost of whole enterprises, and increase the investment opportunities. However, there are few studies focusing on the measurement of financial synergies, especially household appliance industry in China. Therefore, this paper might shed a light on the future study of the synergistic effect.In recent years, great changes have taken place in our country residents’ consumption idea, and maternal and infant consumption has become a valued consumption filed in today’s society. Compared with other consumption fields, maternal and infant market requires a higher standard of safety and quality. Suning Corporation is mainly engaged in home appliances and other articles of daily use, and has not shown its market share in maternal and infant products. This is the reason why Suning decided to have the requisition of Red baby.This paper, from the perspective of financial synergy effect and analyzing Suning’s financial situation after the M&A, mainly adopts the quantitative analysis and qualitative analysis, case study method and literature review to have a comparative analysis of Suning’s financial capacity, cash flow and income before and after M&A. Financial capacity mainly includes the debt paying ability, development ability, operation ability and profitability. It mainly compares the data before and after the merger and acquisition of Suning to analyze whether the M&A will be helpful for Suning’s financial capacity. The cash flow effect will focus on the analysis of cash flow of investment activities, financing activities and operating activities before and after the merger and acquisition. On the perspective of income, it will emphasize the changes of the Suning’s revenue after the merger and acquisition.In terms of Suning’s financial synergy effect in the year 2015, it concludes in this paper that Suning’s financial capacity has been significantly enhanced after the M&A; cash flow levels has been improved compared with before; and the operation revenue has been increased steadily year by year. Through the study of M&A with the example of Suning, it might throw light on other enterprises in the action of M&A. The enterprises which have a thought of M&A should stand on a strategic height and review the M&A, instead of blindly pursuing financial synergy effect. Furthermore, the enterprise should pay special attention to financial integration after M&A. Only by this could the enterprise acquire the good financial synergy effect.