Analysis On Performance Of Household Appliance Enterprises’ Overseas M&A

The household appliance industry is one of the industries with the highest degree of marketization and the most intense competition in China.After more than 30 years of development,China has gradually become a major producer of household appliances,and is transforming into a strong country of household appliances.As China accelerates the implementation of the “going out” strategy,it has also set a new requirement for the household appliance industry to increase the proportion of overseas production and form an international industrial layout.It further promoted the internationalization process of Chinese household appliance companies and the development of overseas M&A activities.This paper studies the performance of Qingdao Haier’s acquisition of GE appliances.First of all,combined with the challenges faced by Chinese household appliance enterprises and the development trend of the industry and the needs of Qingdao Haier’s own development,summed up the motivation of its mergers and acquisitions.Secondly,the event research method is used to study the market performance of M&A,by calculating the cumulative abnormal return and buy-and-hold abnormal return.Finally,non-financial indicators and financial indicators are used to study business performance and financial performance.The study found that the short-term market performance of Qingdao Haier’s acquisition of GE appliances performed well,and the M&A within two years has brought 117.78% of income to investors.In terms of business performance,the company’s market competitiveness has been enhanced: the globalization of the layout is larger,the market coverage is more complete,the market share is improved,the brand value is improved,and the research and development capabilities are enhanced.Due to the large scale of the merger and the relatively short operating period after the completion of the merger,the return on equity has decreased in the short term,and the asset-liability ratio has increased greatly.However,with the deepening of integration and the release of synergies,coupled with the increase in gross profit margin and strong operating cash flow brought by mergers and acquisitions,financial performance is expected to be greatly improved in the later period.Overall,the M&A has achieved better results and increased the company value of Qingdao Haier.