Case Study Of Qingdao Haier M&A Ge Appliance

With the rapid development of the economy,many enterprises in our country take internationalization as their development strategy.Under the background of "One Belt And One Road" in China,cross-border M&A has become an important way for Chinese enterprises to go overseas.With the domestic appliance market entering the stock market,domestic appliance enterprises urgently need to expand the foreign market and enhance the market position in the fierce competition.As an effective means for enterprises to gain market resources quickly and improve their technical skills,cross-border M&A has become a way for many domestic appliance enterprises to improve their competitiveness.However,cross-border M&A will face political,legal,financial,operational and cultural risk.In order to improve the success rate of cross-border M&A,how should the enterprises guard against and defuse the risks in cross-border M&A? This paper selects Qingdao Haier M&A GE appliance business case as an example.Through the analysis of the integrated measures of Haier,this paper provided advice to the home appliance industry in our country to realize the value of the company created.The first chapter,introduction,introduced the research background,raises the question of how cross-border M&A can improve the success rate through effective integration.This paper summarized relevant literature from two aspects of cross-border M&A integration and performance of both home and abroad.Due to the cross-border M&A activity is active in recent years,there is a more mature theory of cross-border M&A.However,it can be hardly seen the successful case like Haier M&A GE appliance.So we hope that this paper can provide relevant reference to enterprise to go abroad.The second chapter,the definition and basic theory of this paper involves defining the concept of cross-border M&A,the market power theory,the enterprise competence theory and synergy theory provides the theory basis for analysis of the case.The third chapter,introduction of Qingdao Haier M&A GE appliance case,this paper shows both companies' history,advantage,organization structure,process of mergers and acquisitions,and the way to trade,trade characteristics and so on.The fourth chapter,analysis of integration and risk of Qingdao Haier M&A GE appliances,this paper analyzed six aspects including strategic integration,business integration,management integration,organization integration,human resource integration and cultural integration,and further discussed the integration of risk.The fifth chapter,performance analysis of M&A and enlightenment,this paper compared the WACC before and after the M&A to measure the effect of overall control of capital and compared the profitability to the average industry level.By using event study,this paper evaluated the short-term performance by CAR and long-term performance by BHAR.This paper also used market power theory,the enterprise competence theory and synergy theory to evaluate the market,technology and brand.And also put forward the corresponding suggestions to home appliance enterprises.The sixth chapter,conclusion and prospect,summarized the case and put forward the research deficiency.The innovation point of this paper is analyzing the case from the angle of integration,which emphasis on the integration of risks and measures after M&A.This paper used event study method,comparative method to analyze and evaluate the performance of M&A.By calculating the weighted average cost of capital(WACC)of Haier before and after the M&A,it shows that the post-M&A WACC lowered 1.64%.By using the cumulative abnormal rate method(CAR)and buy-and-hold average rate method(BHAR),this paper evaluated the reaction of market to the M&A.And this paper also used the comparative method to compare the changes in market share,technological innovation and evaluate the brand influence before and after the M&A.According to the results of the analysis,the paper puts forward some suggestions on how to prevent risks and realize the value creation of home appliance enterprises in cross-border M&A.Through the analysis of the integration and performance of Qingdao Haier M&A GE appliance,this paper put forward suggestions and references to the home appliance industry in our country of overseas M&A and the enterprises in this industries can benefit from the enlightenment.For instance,the companies should pay attention to the financial risks in cross-border M&A,especially the exchange rate risks.The acquirer can use futures,options and other financial derivatives to hedge and avoid risks.To improve the speed of M&A,the company should pay attention to the correlation between internal resources of both sides.The higher the internal resource correlation,the faster the M&A speed and the higher the M&A success rate.So the M&A party should concern the target company in the industry,such as area,enterprise culture and the relevance of the M&A party,try to be complementary advantages,to reduce the risk of mergers and acquisitions so as to improve the success rate of M&A.In addition,with the favorable policy support of One Belt And One Road,it will be of practical guiding significance and application value for Chinese home appliance enterprises to realize the internationalization strategy through cross-border M&A.