| Under the background of the new normal of China’s economy,more and more traditional enterprises in China are facing the pressure of transformation and upgrading.At the same time,the government has issued a number of policies to encourage enterprises to achieve industrial integration through mergers and acquisitions.As an important way for enterprises to realize strategic transformation quickly,M&A behavior is favored by more and more traditional enterprises.However,the effect of most companies’ M&A in the market is not ideal.Whether the M&A behavior can really create value for the enterprise and promote the success of the enterprise transformation is a topic that the academic community has been discussing.Far East Smarter Energy Co.,Ltd(formerly known as Far East Cable Corp.Ltd)was originally as a traditional cable production and sales company.In the case of the downturn of the cable industry,it has transformed itself into a “smart energy and smart city system service provider” through continuous mergers and acquisitions to supplement the new industry chain.This paper studies a series of strategic transformation-oriented M&A activities of the company and explores whether the company’s mergers and acquisitions can bring value to the company.This paper analyzes the internal and external environment of the company before the company’s strategic transformation through SWOT analysis,and based on this,summarizes the motivation of the company’s strategic transformation.In the effect evaluation,it is found that the market reaction formed by the M&A events in the early stage of the transformation of the company is better than that in the later stage of the transformation through Event Study;Through the financial indicator method,it was found that the performance of the company in the second year after the transformation was greatly improved,but the performance declined after the second year;Through the analysis of EVA,it was found that the company’s value creation ability also increased significantly in the second year of strategic transformation,but it declined quickly in the next years;Through the analysis of non-financial dimensions,it is found that the company’s R&D and innovation capabilities have been enhanced significantly,and its international business cooperation has increased rapidly.Finally,this paper finds problems in the process of corporate transformation,such as obvious sequelae of M&A behavior and the weak growth of new business.Therefore,it is recommended that the company should select the target company carefully、provide for impairment of goodwill timely、establish appropriate reward and punishment mechanisms、continue to increase investment in R&D.Intermediaries should maintain independence and assess the value of the target company reasonably.The supervision department shall strengthen the review of M&A applications and increase supervision over intermediaries. |
