Study On The Causes Of Failure In Guangdong Guangzhou Daily Media Co.,Ltd. Merging Xiangxieli And Its Countermeasures And Suggestions

With the development of the technology and the maturity of the market,a new round of merger and acquisition wave is coming.Many enterprises optimize asset allocation,expand their scales and achieve strategic transformation through the way of mergers and reorganization.In recent years,under the promotion of policies and the pursuit of the market,the cultural media industry ushers in the upsurge of mergers and acquisitions.The study of domestic and foreign academe on the mergers and acquisitions of cultural media industry mainly focuses on the motivation of mergers and acquisitions and the performance of mergers and acquisitions.This article analyzes the reasons and countermeasures of the unsuccessful case that Guangdong Guangzhou Daily Media co.,Ltd.merges Advision by using the existing researches.Guangdong Guangzhou Daily Media co.,Ltd.is the first listed newspaper media company in China,while Xiangxieli is one of the leading enterprises on China's big outdoor LED screen.Based on that traditional media industry suffers the impact of Internet,and under the pressure of transformation,Guangdong Guangzhou Daily Media co.,Ltd.merges Advision.In the merger process,Guangdong Guangzhou Daily Media co.,Ltd.carried out the merger at a premium which was 71.37% higher than Advision's net assets.However,the merger results in Guangdong Guangzhou Daily Media co.,Ltd.'s deterioration of profitability,poor operating performance,decline in solvency and developing ability.Through the analysis on these capabilities it is found that the merger ofGuangdong Guangzhou Daily Media co.,Ltd.to Advision was a failure.The reasons for the failure of the merger are as follows.Firstly,the merger motivation of Guangdong Guangzhou Daily Media co.,Ltd.was divorced from the reality of the enterprise.Before the merger decision,the strategy of Guangdong Guangzhou Daily Media co.,Ltd.was separated from the market,and the managers of Guangdong Guangzhou Daily Media co.,Ltd.took a blind diversification;secondly,in the merger process,there was a lack of merger ability,because in the market at that time,the valuation of cultural enterprise was too high,which was divorced from the actual value of the enterprise.At the same time,Guangdong Guangzhou Daily Media co.,Ltd.didn't have enough disposable resources either;thirdly,Guangdong Guangzhou Daily Media co.,Ltd.had problems of the lack of investigation and research on the choice of target enterprises and the lack of matching with the target enterprise.Finally,good integration effect was not gotten after the merger,mainly because of the poor operation integration and cultural integration for the target enterprise.For that,the countermeasures and suggestions of this article are as follows.In the process of merger and acquisition,the merger decision shall be made based on the enterprise's actual condition.Firstly,we shall not only have reasonable strategic positioning for the enterprise's development,but also avoid blind diversified mergers and acquisitions.Secondly,in the process of mergers and acquisitions,we shall improve enterprises' ability of mergers and acquisitions,make reasonable valuation for the target enterprises and improvethe enterprises' core competitiveness at the same time.Thirdly,we shall pay fully attention to investigate the target enterprises during the selection of merger target and give consideration to the matching of the target enterprise and the acquirer at the same time.Finally,after the merger,we must pay attention to improve the integration efficiency.On one hand,we shall increase the operation integration and on the other hand we shall strengthen the cultural integration.