Research On Financial Performance Of Cross-industry Mergers And Acquisitions Under The Background Of Transition

With the continuous development of China’s economy,some traditional industries are facing the risk of increased competition and market saturation.Facing the pressure of performance decline and the bottleneck of development,many companies in this kind of industry begin to make positive changes to their own business strategy,including developing new business and diversification management,in order to disperse their own business risks and obtain new profit growth points.Among them,most companies choose to make non-related diversification of cross-industry M&A transformation.Therefore,whether cross-industry mergers and acquisitions can achieve the goal of transforming the main business,improving performance,and how to choose the transforming industry,formulate mergers and acquisitions strategy to achieve this goal has become the focus of many companies intending to transform.Based on the cross-industry M&A behavior of enterprises under the background of transformation,this paper selects the typical micro case of Kingking to analyze in depth,analyzes the strategy adopted in the process of M&A and the performance after M&A,and provides the companies who hope for M&A transformation the strategic reference to help them successfully transform.This paper mainly uses case study method,and combines literature research method and comparative research method to study from qualitative and quantitative perspectives.Firstly,this paper collates the relevant literature at home and abroad,and elaborates the relevant theories and performance evaluation methods,which lays the foundation for the follow-up study.Secondly,this paper introduces the basic situation of Kingking and its specific implementation of cross-industry M&A,analyses its motivation,external environment and internal conditions for cross-industry M&A under the background of transformation,and on this basis,analyses the specific strategies it chooses under the combined effect of internal and external conditions.Thirdly,this paper uses traditional financial indicators and economic value-added method to evaluate the transformation of Kingking’s M&A behavior and the effect of its strategy implementation from the perspective of financial performance.The study found that Kingking’s cross-industry M&A under the transformation background was successful.The industry that it chose to enter had a good development prospect,and combined with its internal conditions to implement appropriate M&A strategies,corporate performance was improved.Finally,this paper draws the following enlightenment from the case study:(1)When transforming mergers and acquisitions,we should combine external environment,internal conditions and enterprise strategy to select target industries and targets;(2)After the completion of the merger,the overall development strategy of the enterprise should be made according to the specific situation;(3)Pay attention to the development strategy and long-term performance objectives of new business after merger;(4)For companies that continuously acquire multiple target companies,they should pay attention to the synergy between the target companies and integrate them well after the merger.