Research On The Effect Of Corporate M&A Under Government-led

At present,China's economic growth is slowing down,economic development has changed from focusing on speed to focusing on high quality,and it has entered a deepening reform stage.Deepening the reform of state-owned enterprises is a measure in this context.In order to implement China's “Belt and Road Initiative” and the "Go globally" strategy and complete the task of address overcapacity and deleverage,the government merged CSR and CNR into CRRC Corporation Limited in 2015,opening a new wave of state-owned enterprise mergers and acquisitions in China.The effect of mergers and acquisitions of state-owned enterprises is in line with the original intention of leading mergers and acquisitions.Because China's national conditions are different from those in the West,the mergers and acquisitions led by the Chinese government are different from the mergers and acquisitions initiated by enterprises in the market.Government-led mergers and acquisitions have their own particularities and can't be completely explained by Western theoretical systems.Therefore,on the basis of summarizing and analyzing the theories related to the motivation of enterprise merger and acquisition,this paper compares the differences between market-oriented mergers and government-led enterprise mergers and acquisitions.It also analysis why the government of our country should lead enterprise mergers and acquisitions and summarizes the current thinking of government-led mergers and acquisitions in our country.Taking Baosteel's acquisition of WISCO as an example,this paper analyzes the background of Baosteel's acquisition of WISCO and the course of Baosteel's acquisition of WISCO,and explores the motives of government-led Baosteel's acquisition of WISCO from the macro-steel industry and micro-steel enterprises.According to the theory and the government's motivation for the acquisition of Baosteel WISCO Longitudinal comparison of the four financial capabilities of Profitability,Solvency,Operating capacity and Development ability before and after mergers and acquisitions and horizontal comparison of the financial indicators of Baosteel and the industry after mergers and acquisitions,study the financial effects of Baosteel's acquisition of WISCO,and analyze the impact of mergers and acquisitions on the steel industry,The impact of the enterprise and its social benefits,study the effects of the merger,and analyze whether it has reached the motivation and original intention of the government to lead the merger.The steel industry is the cornerstone of China's economy and directly affects China's economic development.With the development of China's steel industry,China's steel industry has excess manufacturing capacity,low profit margins,low Concentration Ratio,unscientific industrial structure,and lack of high-end technology,resulting in insufficient international competitiveness.China's steel industry in 2015 With large-scale financial losses,WISCO was the company with the most losses in A-SHARE.Therefore,the government hopes to increase Concentration Ratio through the “strong combination” of Baosteel WISCO's two major steel companies,optimize industrial structure and industrial layout,withdraw inefficient manufacturing capacity,increase R&D investment,and change the status of steel in the "low-end surplus,high-end shortage",improve the profit rate of China's steel enterprises,enhance the upstream and downstream discourse power of China's steel industry and its international competitiveness,while eliminating WISCO's losses and gaining synergies.Through analysis,the paper believes that the merger and acquisition effect of the merger has reached the original intention of the government to lead its mergers and acquisitions.First,after the merger,Baosteel's performance in 2017 and 2018 rose sharply,hitting a record high.WISCO also achieved profit and elimination loss after the merger.Baosteel's financial capacity and pre-M&A were flat and some of its capabilities have risen,has not been dragged down by WISCO,has been dragged down.Secondly,Baosteel completed the task of reduce excessive capacity planned by the State Council ahead of schedule,and the task of address overcapacity in China was completed ahead of schedule;With the merger of these two major steel companies,the Concentration Ratio of China's steel industry has also been improved;Finally,the combined Baosteel integrated the research and development capabilities of the two companies,a number of technologies broke through the foreign blockade,and localized high-end steel products,and Baosteel's acquisition of WISCO has the second largest production capacity in the world,making China's steel enterprises more advantageous in the world steel enterprises competition.Therefore,the government led Baosteel's acquisition of WISCO to obtain a positive effect of mergers and acquisitions.