TUS-SOUND's Continuous M&A Performance Study

In recent years,with the increasingly serious environmental protection problems brought about by the extensive economic development,the government and society have gradually increased their attention to the environmental protection industry,and the environmental protection industry has developed rapidly.Under the gradual strictness of the government's environmental protection supervision and the increasing demand for comprehensive environmental protection capabilities,the environmental protection industry has entered a stage of frequent M&A.Many environmental protection companies have obtained epitaxial development through continuous mergers and acquisitions,thus occupying market share and becoming the leader in the field.Through continuous M&A,TUS-SOUND gradually moved from solid waste construction builders to solid waste integrated integrated system service providers.Its high-speed M&A rhythm is eye-catching,but does the continuous merger and acquisition behavior really bring the expected value increase to the company? In view of this,this paper takes the 2013-2017 Enlightenment TUS-SOUND continuous M&A incident as the research object,first combs the research and theory of continuous mergers and acquisitions,introduces the basic situation of the company and the merger and acquisition process,and analyzes the motivation of the company's continuous mergers and acquisitions.Secondly,the case study method is used to evaluate the performance of continuous M&A from short-term and long-term perspectives.Finally,based on the analysis results,the conclusions and implications of the case are drawn.The short-term results based on the event research method show that: overall,continuous mergers and acquisitions bring certain wealth effects to the company's shareholders in the short term.Specifically: in the window period(-5,5),the short-term performance of M&A is before and after the announcement.The cumulative excess return(CAR)was positive for the three days,the fourth day and the fifth day;the positive and negative for CAR in the M&A event were half;the average CAR performance in the 2015 M&A event was the best.The long-term results based on the financial indicator method and the factor analysis method show that the overall continuous merger does not bring positive performance to the company.Specifically,the first is the rapid expansion of assets,the basic completion of the industrial chain layout;There is a decline in the middle,mainly because the growth rate of non-current assets is faster than the growth rate of operating income;third,the financial risks increase,the company's capital structure is more and more radical;fourth,the profit level needs to be improved,the key business sector is in the investment construction period,and the profit release needs time.Therefore,based on the case study of TUSSOUND,the relevant enlightenment is summarized: First,the whole process of continuous mergers and acquisitions should be guided by the overall strategic goals of the company;secondly,when implementing the M&A plan,it is necessary to pay attention to selecting appropriate M&A objects and payment methods,and controlling risks throughout the process.In addition,the key point in the whole process of continuous mergers and acquisitions is the quality of mergers and acquisitions,not the speed of mergers and acquisitions;in the end,we cannot ignore the inhibition of the excessively aggressive capital structure on the subsequent performance of mergers and acquisitions.At the same time,I hope that the research in this paper can provide reference for the company's subsequent mergers and acquisitions and comparable company's continuous M&A decisions.