Study On The Financial Performance In The Acquisition Between Zoomlion's And Chery Heavy Industry

With the development of the economy,the market competition is becoming increasingly fierce,the economic environment is changing rapidly,and there are more and more means for enterprises to seek development.More enterprises no longer rely on their own accumulation for development,but through acquisitions for rapid resource integration and scale expansion.There has been six waves of acquisitions,and classic cases continue to emerge.However,acquisitions are not all rational,and only rational acquisitions can achieve the company's strategic goals.During the period of 2011-2014,the construction machinery industry suffered from a cold winter,the industry competition intensified,profits fell sharply,and listed companies in construction machinery suffered heavy losses.At the same time,the state attaches great importance to the agricultural modernization,and the agricultural machinery market has great potential.To open up agricultural machinery business sector through acquisition,seeking new profit growth points,offset the decline in the main business sector revenue,is of great significance to engineering machinery listed companies.Acquisition is an important development tool for enterprises,the financial performance of acquisitions should be analyzed and the results of acquisitions should be accurately evaluated so as to conduct rational acquisitions.In this paper,we use the case study method to try to conduct an in-depth study on the case of the acquisition between Chery Heavy Industry and Zoomlion in 2014.Based on efficiency theory and market power theory,this paper takes the acquisition between Zoomlion and Chery Heavy Industry as an example.Firstly,it starts with the participants of this acquisition,analyzes the background of the acquisition and the motivation of it,and analyzes the integration process of both parties after the acquisition.Secondly,using the financial indicator analysis method and EVA analysis method to analyze the case of the acquisition between Chery Heavy Industry and Zoomlion.The financial index analysis method selects representative indicators of the construction machinery industry,analyzes the acquisition from the four dimensions of profitability,operational capability,solvency and growth ability,and selects the major listed companies in the construction machinery industry and the industry average for comparison.After analysis,it was found that in the short term the acquisition failed to improve its operational capabilities,and also reduced its solvency.At the same time,due to high operating costs,and the need to invest to integrate the personnel and resources of the acquirer,increase the investment in agricultural machinery and research,etc.,although its operating income shows a growth trend,its profitability has fallen sharply in the short term,and its EVA is also declining.In the first two years after the acquisition,there was a downward trend,and after two years of accumulation,its agricultural machinery business revenue increased significantly,financial indicators improved,and EVA turned into profitable.Through the analysis of non-financial factors,it is found that this acquisition has enabled Zoomlion to obtain a higher agricultural machinery brand value.Therefore,the conclusion drawn in this paper is: The acquisition has brought about the improvement of corporate financial performance,and realized the strategic goal of Zoomlion's opening up agricultural machinery business segment.It can be said that the acquisition was successful.Finally,based on the analysis of the acquisition,this paper summarizes the experience brought by it,such as rapid transformation through acquisitions,seeking professional cooperation for strategic goal,etc.,so as to provide some guidance for the mergers and acquisitions in construction machinery industry.