Research On Vertical M&A Of Coal And Electricity Industry Enterprises Based On Industrial Value Chain

With the growing activity of the current capital market and the vigorous development of the social economy,corporate mergers and acquisitions have become an important and widespread economic phenomenon.The reason is that through mergers and acquisitions,enterprises can provide opportunities to expand their business,enhance their core competitiveness in the industrial chain,and achieve concentration of corporate capital and scale,thereby achieving the strategic goal of upgrading the enterprise value chain and external growth.The rapid development of Chinese companies has intensified competition among enterprises.Enterprises have expanded their scale of operations by acquiring excel ent companies and began to change the traditional way of self-accumulation.In addition,they also realized that through the vertical merger and continuous improvement of the industrial chain,the industrial chain can be optimized and upgraded,thereby improving corporate performance.With the continuous improvement of China's capital market and the development of market economy,as well as the acceleration of industrial restructuring and economic transformation during the 12 th Five-Year Plan period,these factors promote the rapid development of China's M&A market,among which the position of vertical M&A in China's M&A activities.It is becoming more and more prominent and is more common in industries such as energy,construction machinery,and automobile manufacturing.China's coal-fired power industry has a very high degree of correlation and its concentration is constantly improving.The data shows that China has about 1.56 billion kilowatts of power generation,of which about 57% are coal-fired generating units,and more than 70% of the total cost of power generation companies are fuel costs.Fluctuations in coal prices have directly affected the efficiency of thermal power companies.As the largest user of coal enterprises and the thermal power enterprises in the market,the coal required for thermal power production accounts for more than 50% of the total coal consumption.Therefore,the consumption conversion capacity of coal resources is directly affected by the profit and loss of thermal power enterprises.The merger and reorganization of Guodian Group and Shenhua Group is a major measure for the country to rationalize the coal-fired power industry chain and promote coordinated and orderly development of the coal-fired power industry.This paper studies the case of Shenhua Group's acquisition of Guodian Power,and analyzes the strategy of vertical mergers and acquisitions in this industry chain based on the perspective of industrial value chain.Firstly,this paper reviews the research results of relevant scholars,and combs and comments on related literatures.Secondly,this paper defines the related concepts of industrial value chain and reviews relevant domestic and international industrial value chain and related theories of coal and electricity industry mergers and acquisitions;The Group and Guodian Power's industrial value chain were introduced and analyzed.Then the reasons and strategies of Shenhua Group's acquisition of Guodian Power were introduced.The effect of M&A strategy was analyzed,and the rationality of the M&A was analyzed from the perspective of industrial value chain.Finally,the conclusions and inspirations of this paper are drawn,and the shortcomings of the research are summarized.