On The Performance Of Transnational Mergers And Acquisitions Enterprises

Merger and acquisition is an important way of capital operation and can promote the upgrading and transformation of the real economy.Merger and acquisition among enterprises has become an important means of reallocating resources,acquiring advanced technology and enhancing core competitiveness in market economic activities.At present,China’s market economy is in a deep period of transformation,enterprises expand internationally by means of mergers and acquisitions has become common.For example,the great success of Geely Holding Group ’s acquisition of Volvo in 2010 not only greatly improved Geely Holding Group ’s product popularity,but also promoted the continuous growth rate of its operating income and net profit.However,not all transnational mergers and acquisitions can achieve positive results.Some enterprises choose inappropriate merger and acquisition targets or have unfavorable integration after merger and acquisition,which eventually lead to the failure of merger and acquisition activities.To sum up,for Chinese enterprises,how to plan and launch a successful merger and acquisition is a complex and difficult thing.Last but not least,the inspection of enterprise performance after the merger and acquisition is an important basis to measure whether the merger and acquisition is successful or not.Group is one of the leading figures and models.Since its establishment in 1984,Haier has made steady progress and kept improving.It has not only won the " Top 500 Chinese Enterprises" but also gained extraordinary popularity in the international market.With the development of the Internet era,Haier has transformed from its original production mode into an enterprise closely connected with the Internet,subverting the traditional enterprise’s self-contained closed system and striving for further development.In January 2016,Haier officially announced its acquisition of General Electric(GE)and caused a great stir in the industry.Haier,after successfully attacking Electrolux,completed the basic acquisition in half a year with the attitude of " snake swallowing elephant",firmly holding the top three positions in global white electricity sales,and steadily moving forward in the international route.After acquiring GEA,Haier’s speed of brand promotion and channel construction has obviously reached another small peak.Considering that Haier’s acquisition of general electric appliances has a high visibility,a wide range of influence,a relatively recent occurrence and a unique means of payment,it is worth studying.However,this paper intends to measure the effectiveness of the merger by analyzing the specific performance before and after the merger.At present,there has been no breakthrough in the research on the performance of cross-border merger about household appliance enterprises.Therefore,this paper intends to provide good reference for other transnational enterprises by studying the case on Haier’s merger of general household appliance.This paper mainly adopts the case study method and the literature research method to explore the mature experience of M&A cases in recent years,it also adopts the event study method on the performance analysis of M&A.Firstly,based on the relevant concepts and theories of merger and acquisition,this paper makes a specific analysis on the process and purpose of Haier’s merger and acquisition and fully explains the intention,which is to achieve business coordination,acquire technology and expand the international market.Secondly,this paper uses the event study method to measure the degree on return of the merger to shareholder value by calculating the excess cumulative rate of return,then,using the financial index method to specifically investigate the financial performance after the merger from the four aspects of profitability,debt paying ability,operating ability and growth ability.Thirdly,combining with the market situation before and after the merger,this paper makes a comparative analysis of the non-financial performance of the merger.Finally,based on the case analysis,this paper draws the experience and lessons on Haier’s acquisition of general household appliances and discusses the enlightenment brought by the acquisition.After a detailed study of theory,process and purpose with rigorous and careful analysis of financial data,this paper believes that Haier’s acquisition of GE is a model case of its success.It not only brings Haier the promotion of brand awareness and the acquisition of technology,but also starts its market in the United States,bringing a small upsurge in its channel construction speed.Based on the " cross-border" mergers and acquisitions of " home appliance industry",this paper finds that home appliance enterprises such as Haier have successfully expanded and developed by seeking industrial upgrading and transformation through overseas mergers and acquisitions and successfully utilizing synergies.