Research On Synergy Effect Of Jinyu Group’s Merger And Acquisition Of Jidong Cement

With the rapid development of market economy,M & A has become an important and common form of capital transaction.On January 22,2013,12 ministries and commissions,including the Ministry of industry and information technology and the national development and Reform Commission,jointly issued "the guidance on accelerating the merger and reorganization of enterprises in key industries",which clearly requires accelerating the merger and reorganization of automobile,steel,cement and other industries,and striving to improve the concentration of various industries.The case of Jinyu group’s M & A of Jidong Cement,as the largest M & A case of cement industry in China,is of great concern.Based on the motivation of M & A,this paper studies the synergy of M & A,which will provide valuable reference for the future M & A of cement industry in China.This article uses the "accounting index method" and "cash flow discount model" to analyze and verify the synergy effect of Jinyu Group’s acquisition of Jidong Cement.The paper summarizes the corresponding methods used in the identification of synergy effects,and briefly explains the "Boston matrix","accounting index method" and "cash flow discount model" and other methods.Immediately followed by a brief introduction to the corporate profiles of Jinyu Group and Jidong Cement and the process of mergers and acquisitions,and an in-depth study of the possible synergies in operation,finance and management of this merger.At the end of this article,after comparing with the average financial data of five representative building materials companies,and excluding Jinyu Group’s financial data changed only by the influence of the industry,the accounting index analysis method was used to acquire before and after the acquisition of Jinyu Group The financial indicators of the company have been analyzed to compare whether it has undergone significant changes due to mergers and acquisitions to determine whether the merger has produced a synergistic effect.In addition,in order to further verify whether the merger has made the company obtain a synergistic effect,this article also uses cash flow discounts The model calculates the intrinsic value before and after mergers and acquisitions,compares whether the intrinsic value has increased through mergers and acquisitions,and finally draws the conclusion of this article.In terms of business synergy,Jinyu group has expanded its industrial scale by using the M & A of Jidong Cement,becoming the largest cement enterprise in North China,with its regional influence strengthened and its pricing power improved accordingly.In terms of financial synergy,through M & A,it can take advantage of Jinyu group’s sufficient cash flow to help Jidong Cement increase R & D funds,expand production scale and create higher benefits for both sides.In terms of management synergy,through M & A,Jinyu group can use its own advantages and experience in enterprise management to help Jidong group improve its management ability and efficiency,and reduce the operating costs of both sides.In general,the synergy effect of the merger and acquisition is obvious,consolidating the leading position of Jinyu group in the cement industry of Beijing Tianjin Hebei region,broadening the scope of cement business,and laying a solid foundation for its future strategic development.