Case Analysis Of Midea Group’s Cross-Border M&A Of KUKA

With the development of the globalization of economy,cross-border M&A has become one of the significant ways for companies to integrate resources at home and abroad,expand business scale,enhance core competitiveness,and achieve sustainable and high-quality development.In recent years,cross-border M&A has developed rapidly,and become more rational and standardized,avoiding blind mergers.On May 26,2016,Midea Group officially announced the acquisition and proposed a tender offer to KUKA.On January 7,2017,Midea Group announced that it officially completed the acquisition of KUKA Group and achieved 94.55% shareholding of KUKA.Taken Midea Group’s cross-border M&A of KUKA as research object,and combined with the background of China’s cross-border M&A,the development background and the future planning of Midea Group,the development prospects of robot industry,this paper contented the process of Midea Group’s acquisition in detail,analyzed the motivation of Midea Group’s acquisition of KUKA.For market reaction analysis,this paper analyzed the market responses to this M&A with event study method.For financial analysis,this article analyzed and evaluated whether the M&A brought value to the long-term operation of the enterprise from four financial indicators.When compared with the financial indicators of the industry,the industry average of home appliance manufacturing enterprises was selected for horizontal comparison analysis to evaluate the impact of the merger of Midea Group on the home appliance industry.Through analysis,it is founded that the acquisition of KUKA by Midea Group is motivated by promoting the "double intelligence" strategy,seizing the development opportunities of domestic robots,expanding the brand effect and promoting the development of its group logistics industry;Midea Group has made full preparations for the merger ahead of time,avoiding the risk of mergers and acquisitions caused by strategic decision mistakes,overvaluation and political review barriers.It can be seen from the market reaction analysis that the cumulative excess return rate during this period was only 0.63%,and the market’s behavior towards Midea Group’s cross-border M&A of KUKA was on the sidelines.Through the analysis of financial indicators,it is found that although the merger has brought heavy debt to Midea Group,it has brought increase in operating income and net profit.But Midea Group should pay attention to the problem that the growth rate of operating income and net profit brought by the acquisition of KUKA does not match.By comparing the average value of the home appliance industry,it can be seen that the brand value of the Midea Group and the business value of the company have been improved.The successful acquisition of KUKA by Midea Group is due to Midea Group’s good financial structure,appropriate M&A direction and M&A target,and advance preparations for M&A.Meanwhile,the corresponding solving proposals are presented on the subsequent integration problems in the merger,hoping to give reference for the future development of China’s home appliance manufacturing industry.