Case Study Of Baoshan Iron & Steel Co.,Ltd. M&A Wuhan Iron & Steel Co.,Ltd.

After the rapid development of China's steel industry over the past decade,the output and quality of its products have been improved.However,since the development of the steel industry,production has increased substantially and overcapacity has begun to appear.The period of high profit growth is gone forever.This shows that China's steel industry is entering an adjustment period and it is necessary to seek solutions to the current difficulties.With the deterioration of the business environment,if China's steel companies want to escape the predicament and achieve sustainable development,it will inevitably have to take the road of mergers and acquisitions,which is also the choice of the times.In view of China's special market and economic environment,steel companies have used a large amount of market resources and have a wide range of influence when actively seeking assistance from the merger and reorganization.Under the background of the national policy of energy conservation and emission reduction and removal of excess capacity,it is very important how to take the road of mergers and acquisitions in China's steel industry and enterprises to optimize resource allocation and upgrade of the entire industrial structure.Therefore,the research in this paper has important practical significance.This article takes the acquisition of Wuhan Iron and Steel Co.,Ltd.as the case of Baosteel Co.,Ltd.and deeply discusses the merger and acquisition integration process of Baosteel Co.,Ltd.,and how the resources of both parties can be matched to increase the company's value and influence on the company's performance.First,a brief introduction was given to the M&A parties and M&A background,and the entire M&A process and M&A transaction structure were combed.Secondly,from the aspects of product variety,production R&D,procurement,sales,and brand effect,the two companies' resource matching was analyzed.It was found that Baosteel Co.,Ltd.and Wuhan Iron and Steel Co.,Ltd.can use the shared technical resources to strengthen their competitive advantage in terms of product variety;Further integration of the two parties' technological advantages;in the procurement process can reduce costs;in sales can provide more comprehensive sales services;in the brand effect can be combined with both advantages to create a moreinternationally competitive steel brands.Thirdly,this article analyzes M&A integration strategy from the aspects of organizational structure integration,product production integration,technology R&D integration,procurement business integration,sales business integration and financial integration,and analyzes the efficiency and synergy effect of this M&A integration.Finally,through the analysis of the changes in stock prices and financial indicators before and after the merger and acquisition,the effects of M&A and restructuring are examined.On the whole,Baosteel Co.,Ltd.achieved a substantial increase in assets and capital after mergers and acquisitions.The company's strength has been improved.Crude steel production has changed from the fifth place in the world to the third place in the world.The ranking of the industry has improved compared to before,and Baosteel's shares have been strengthened throughout the industry.The influence of the macro environment has promoted the development of the company,and the company has obvious competitive advantages.The innovations in this paper are as follows: Firstly,the entire process of Baosteel's acquisition of WISCO shares case was analyzed and described for the first time.The resource matching of M&A parties and the integration strategy after M&A were comprehensively studied.Then the M&A performance analysis was conducted on them.Validation,in order to sum up the problems and solutions in the mergers and acquisitions,and obtain successful experience.Secondly,the article selects typical cases of mergers and acquisitions conducted by the leading steel and steel companies in the context of supply-side reforms and capacity removals,and has a certain representation.Finally,the research method of this paper also has some innovations.For example,when researching market performance,two methods,CAR and BHAR,are adopted to analyze the short-term and long-term performance after merger and acquisition respectively,in order to understand the effect of mergers and acquisitions more comprehensively;It will not only longitudinally compare several consecutive financial data of Baosteel,but also make horizontal comparison with the average level of the industry to make the research results more accurate and reliable.