Whether Cross-border M&A Creat Value

From agricultural civilization to industrial civilization,the relationship between human beings and the environment has experienced the process of dependence,confrontation,and coordinated development,and thus the environmental protection industry has emerged.In recent years,due to the dual impact of the globalization process and ‘the Belt and Road’ policy,China’s environmental protection companies have gradually changed their minds and sought an extended strategic development path based on M&A.However,most of the M&A activities,which are based on the purchase at a high price,are ended with high risk and low returns.Therefore,it is of great practical significance for the research on whether cross-border M&A can bring value to environmental protection enterprises.Based on the previous research,this paper takes the representative event of Yonker environmental protection company acquired American IST as an example,and conducts in-depth research on the core issue of whether to create value.The article first analyzes the overall situation of cross-border M&A of environmental protection enterprises in China.On this basis,it gives a detailed introduction to the case of Yonker acquired IST,including the overview of M&A parties,the background,motivation and process of M&A.In the process of measuring whether the M&A creates value,this paper mainly analyzes the impact of cross-border M&A on the shareholders behalf of Yonker company,including the use of event study to discuss whether the shareholders got positive returns from this news in the short-term evaluation.In the long-term evaluation,this paper use capital appreciation method to observe whether M&A improve the company’s financial performance and realize the increase of capital value.The research results show that the event of Yonker’s acquisition of American IST has realized the value creation in both short-term and long-term study.In the end,from this case,some experiences that can be applied to cross-border M&A in the environmental protection industry.First of all,it’s essential for enterprises to think clearly,posit accurately,grasp suitable opportunities,not to make decisions blindly.Secondly,environmental enterprises should change the choice of M&A companies when conducting overseas mergers and acquisitions.In addition to considering the wealthy leading overseas enterprises,they can also consider some “small but excellent” quality enterprises to reduce risk.Finally,corporates should also combine their own strategic goals with integration process to achieve the value enhancement.