Study On The Merger Result Of Baosteel&WISCO

As China enters the later stage of industrialization and the economic development enters the New Normal,China's steel industry has entered a mature stage of development.However,the development of the steel industry is also facing the problem of low utilization rate of steel capacity and serious imbalance between supply and demand.In order to promote the "Belt and Road Initiatives" strategy,to help the reform of state-owned enterprises,the strategic mergers and acquisitions(M&A)of state-owned enterprises have been on the rise,and steel companies have become the preferred choice for M&A.After a winter of high costs and low prices,the domestic steel industry is suffering from low concentration and overcapacity.Under the pressure of domestic policy encouragement and international competition,the merger and integration of Baosteel & WISCO plays an important role in demonstrating and promoting the merger of other enterprises under the same industrial chain.Studying its experience and inspiration will provide more reference significance for the industry M&A wave.This thesis adopts the case study method and selects the merger cases of Baosteel & WISCO as the research object,and conducts in-depth research from the merger theory to practice.It consists of five chapters: First of all,the article mainly expounds the research background,significance of the subject,the research status at home and abroad,and the ideas for writing.Secondly,the related concepts,merger theory and several analysis methods are introduced,forming the theoretical basis and analysis framework of this paper.Thirdly,it introduces the situation,background,motivation,plan and process of the merger.Then,the short-term market performance of the case is analyzed through the event study method,and the financial performance evaluation system is constructed to analyze the medium-and long-term financial performance using the financial indicators method.The merger effect is evaluated from the perspective of qualitative analysis.Finally,the corresponding conclusions and implications are obtained.The main problems studied in this thesis are the motivation of the merger of Baosteel & WISCO and whether the merger and integration can improve the company's performance and bring merger effect.The study found that Baosteel's WISCO merger was generally successful,bringing economic,social and ecological benefits.This merger was motivated by synergies and overcapacity.In terms of market performance,investors gave positive expectations,and the merger as a whole increased shareholders' wealth and gained positive abnormal returns.In terms of financial performance,Baosteel had more advantages than WISCO before the merger.After the merger,the profitability index declined slightly,but it was still the industry leader.Some indexes showed a positive trend of first falling and then rising.The improvement of growth ability,operation ability,cost control ability and solvency shows that the merger achieved synergy in operation,management and finance.The combined asset and liability levels remained healthy.The analysis of the merger effect found that after the merger,the market share of the core products was increased,the company's bargaining power was strengthened,and the synergies in sales,purchasing,R&D and management was remarkable.At the same time,it implemented the requirements of the national capacity-removal policy,resolved the vicious competition caused by product isomorphism,and built a first-class listed company with strong international competitiveness and green environmental protection.The main enlightenment of this thesis is:(1)enterprises should strengthen the integration of merger to achieve the growth of performance.(2)at the government level,the industry should be promoted by "strong integration,regional integration" and "restructuring to capacity".(3)On the basis of giving full play to the basic role of the market,the merger of central enterprises should strengthen the national macro-control,optimize the allocation of resources,improve efficiency and promote development.