Analysis Of The Financial Effect Based On Mengniu Merging Yashily

With the development of economy,competitions among enterprises become intense.Merger and acquisition become the first choice for enterprise to expand scale.Since 2001 merger and acquisition have become more frequent,the number and scale of mergers continue to grow.Just in 2010,the amount for mergers and acquisitions occurred in our country were 2771,transactions were up to $177.21 billion.But whether mergers and acquisitions can lead to improved performance and value for the enterprise needs to be further studied.The merger and acquisition between Mengniu and Yashily was one of the ten mergers in 2013,and it was China's dairy industry's biggest merger ever.But what the company got and what we can learn for our dairy industry future merger and acquisition still need to explore.Based on the effect theory of mergers and acquisitions and the event of Mengniu merged Yashily,we analyze the motivation,combine the motivation and development after the event,establish an effect evaluation system,then we analyze the market reaction,financial and non-financial indicators.This event opened milk powder market for Mengniu,profitability and growth ability of Mengniu were promoted,and Mengniu's product structure was reformed,powdered milk business became as important as liquid milk,ice-cream business.Because of the high cost of this event and single payment,Mengniu's debt was brought to high level.But we analyze the response from the market,abnormal return was up to 22%,the positive reaction of the markets was obvious.At the end of the article,according to the negative effect of this merger and acquisition,we make some suggestions.First before the acquisition we should make investigation,evaluate the target enterprise,and reduce the risk.Second the payment is not only finished in cash,but also more than one method.Thirdly,we should strengthen integration after the merger,including human resources,culture,organizational and operational aspects of the integration.