Motivation And Performance Analysis Of Qingdao Haier’s Cross-border Merger And Acquisition Of GE Appliances

Economic globalization is becoming more and more intense,which has become the mainstream trend of current world economic development.In order to promote enterprises to actively participate in overseas competition and cooperation,the State implements the "going out strategy".There are two main forms of "going out" strategy: creating investment and transnational mergers and acquisitions.Compared with investment creation,transnational mergers and acquisitions can quickly enter the target market,bypass technical barriers and make up for the lack of experience.Therefore,more and more enterprises choose transnational mergers and acquisitions,including household appliances enterprises.Transnational mergers and acquisitions can enhance the scale of enterprises,obtain high-quality resources and optimize the allocation of capital in a relatively short time,so as to achieve the purpose of improving international influence and competitiveness.Many enterprises achieve foreign strategic deployment through transnational mergers and acquisitions.Qingdao Haier’s merger and acquisition of general household appliances is one of the typical cases of transnational merger and acquisition of household appliances enterprises.Its motivation and performance are worth studying.This paper takes Qingdao Haier as a case to study.In 2016,the company acquired GE’s household appliances business for $5.58 billion.This acquisition is the largest cross-border acquisition of China’s household appliances industry so far,and is a rare all-cash acquisition.This paper uses the literature research method to analyze the motivation of the M&A;the event study method to study its market performance;the financial indicators method to analyze the financial performance before and after cross-border M&A vertically and horizontally;combined with non-financial indicators as a supplement to the financial indicators,it specifically analyzes the technology development,marketing channels and brand effects of Qingdao Haier;finally,it summarizes the results of the analysis and the future.There are some findings:First,Qingdao Haier implemented the M&A on the basis of technological innovation,business expansion,cost synergy and brand globalization.Secondly,in terms of market performance,the market responded positively to the event and enhanced the value of shareholders’ rights and interests.Third,in terms of financial performance,Qingdao Haier’s development capacity has improved in the two years after M&A.However,due to the impact of all-cash M&A,its solvency declines,which may further face greater financial risks.Its profitability is basically stable,and its operating capacity is slightly reduced.It is necessary to strengthen integration and constantly adapt to each other after mergers and acquisitions in order to gradually achieve synergy.In terms of non-financial performance,Qingdao Haier’s technology research and development,sales channels and brand effect have been improved,and its original intention of M&A has been basically realized after cross-border M&A.Finally,the paper summarizes the enlightenment and reference of this case for other enterprises,in order to help other enterprises to implement cross-border M&A.