Research On The Performance Of Baosteel's Acquisition Of WISCO Under The Background Of SOE Reform

As the basic industry of the national economy,the steel industry has a long-term influence to investment,and it shows strong employment capacity and high industrial relationship.The steel industry has made important contributions to our country's economic and social development.However,with the mounting downward economic pressure,the market demand of steel products has fallen.In 2015,the capacity utilization of China's crude steel was only 67%.And the problem of overcapacity has become more prominent.In order to solve the excess capacity,the government proposes to carry out professional integration through business restructuring and absorption and merger in the reform of state-owned enterprises.The State Council pointed out that we should optimize the industrial structure and promote the merger and reorganization of the steel industry.Under this background,Baosteel and WISCO began to implement merger and acquisition on June 26,2016.However,there are problems that whether its performance has been improved need to be studied.This paper takes Baosteel merged WISCO as a case.At First,the paper introduces the basic situation of both of M&A.Then the paper analyzes the background and causes of the M&A.Then the paper introduces the process and plan of the M&A.And the paper analyzes the M&A performance of Baosteel from three aspects: First,the paper evaluates market performance by the event research method.The study shows that the market performance is not significant.The second is to use factor analysis method to analyze the financial performance,and The study finds that the performance of Baosteel in the year of M&A increased significantly,then the second year decreased;This paper uses the financial index method to analyze the operation ability,profitability,development ability and debt paying ability of Baosteel;The third is to analyze the non-financial performance of Baosteel from the perspective of innovation ability and production and marketing situation.Finally,this paper summarizes the M&A and puts forward suggestions.I hope that the article can provide reference for the merger and acquisition of state-owned enterprises in China.