Case Study Of Dongjiang Environmental Protection's Continuous M&A Performance

While the environmental protection industry is developing at a high speed,it has become the primary choice for environmental protection companies to expand their market share and increase their market competitiveness through continuous acquisitions.However,continuous M&A are not a simple merger of single M&As.It has become the basis for many environmental protection companies.Dongjiang is a typical example.The development status of the entire company is in a state of continuous M&As.In a short period of five years,Dongjiang has greatly improved both it's total assets and net profits,and the company's value has increased rapidly.However,this kind of rapid growth and value creation of Dongjiang really benefits from the company's extension-type continuous M&A strategy,which is the subject of this article.This article first focused the continuous acquisition process of Dongjiang,and summarized the three motives of the company's continuous M&As.Secondly,the short-term results show that during the window period(-5,5),when the CAAR tested for significance,there was a significant difference only between the date of the announcement of the merger and the second day after the announcement date.The short-term performance of Dongjiang continuous acquisition was not obvious.The long-term results show that Dongjiang continuous acquisition strategy has a positive effect on its profitability and growth capability;Dongjiang EVA indicators from 2012 to 2016 are all positive.The company's EVA growth rate has reached 245.50% in 2016,and the company's ability to create wealth has increased.In the principal component analysis,the overall performance score has risen linearly from 2014 to 2016,and has performed well in 2015 and 2016 reached 1.15 and 2.51 respectively,the company's long-term performance is significant.At the same time,a detailed analysis of the company's 2013 performance decline is not due to the company's continuous M&A strategy.It also conducted an overall evaluation of Dongjiang continuous M&A performance and analyzed the reasons for the company's outstanding long-term performance.Finally,based on the case analysis,four case revelations are drawn: M&A strategy is clear;innovative company financing;innovative company M&A skills;don't ignore endogenous growth in order to provide reference for M&As of other companies in the same industry.