Case Study Of Baosteel Merger And Acquisition Of WISCO

Iron and steel industry is an important basic industry of our country economy.Since the 21 st century,the rapid growth of the market demand of the steel industry has led to the rapid development of China's steel industry,which effectively meets the development needs of China's national economy.However,with the rapid development of the steel industry,a series of problems and contradictions such as overcapacity,unreasonable structure,low industrial concentration and environmental pollution are becoming more and more obvious.Since 2016,China has vigorously promoted supply-side structural reform.Its main tasks are to cut production capacity,reduce inventory,deleverage,reduce costs and strengthen weak links.Merger and reorganization of iron and steel enterprises is an important means to optimize resource allocation,implement efficient and low-cost capital expansion,achieve high-level professional development and improve the overall strength.The acquisition of Wisco by Baosteel will play an exemplary role in the reform of state-owned enterprises.Baowu merger is not only the need of policy regulation of China's steel industry,but also the need of developing and strengthening the steel industry.The strategic recombination of the two is of great benefit to the improvement of enterprise efficiency,the enhancement of enterprise competitiveness,the improvement of industrial concentration,the reduction of production capacity,and the acceleration of the reform of state-owned enterprises.Moreover,the experience of the two companies' successful restructuring is of great significance to the industrial restructuring of the whole steel industry.Therefore,the study of its merger case is of great significance.Based on the theory of merger and reorganization,this paper makes a deep analysis and research on the case of Baosteel's merger and acquisition of Wisco.This paper introduces Baosteel and Wuhan iron and steel,and describes the specific process and merger plan of Baosteel's merger and acquisition of Wuhan iron and steel.This paper analyzes the M&A motivation of Baosteel and Wisco,conducts M&A performance evaluation,M&A effect analysis and M&A integration analysis on this M&A event through event study method and financial index analysis method.Through reviewing the whole process of Baowu merger,the existing problems are analyzed and discussed.In view of the problems existing in the case of Baosteel's merger with Wuhan iron and steel co.,this paper puts forward feasible countermeasures and Suggestions accordingly.Meanwhile,taking this case as a reference,it further puts forward countermeasures and Suggestions for improving the merger of listed companies in the steel industry.Further enrich the research results of mergers and acquisitions of domestic steel companies to provide more research reference for subsequent mergers and acquisitions.