| With the healthy and stable and sustainable development of China’s economy,the development of China’s capital market continues to grow,and the orderly advancement of listed companies’ mergers and acquisitions in the capital market will also become an important channel to support the development of the real economy.M&A among Chinese enterprises has become an important way to expand the scale of enterprises and enhance their competitiveness.The &A activities of Chinese enterprises are becoming more and more frequent.The Chinese M&A market has entered a stage of rapid development since 2014.The number and scale of transactions have reached record highs,and it has become the second largest M&A investment destination in the world after the United States.In 2018,the Chinese M&A market announced 6,988 M&A cases,of which 4,965 were disclosed and the total transaction amount was approximately US $ 576.843 billion.Wuxi Little Swan Co.,Ltd.is a well-known home appliance company,especially in the washing machine field,it has a high industry status.Midea Group is one of the leaders in China’s home appliance industry,with a wide range of operations.Midea Group has controlled the Little Swan Company earlier.The motivation for this privatization of Little Swan and the effect it brought to Midea Group after the merger and acquisition are the issues explored in this article.The article first sorts out the relevant theoretical and practical research on the motivation of M&A,and summarizes the research results of domestic and foreign scholars.Motivation theories of enterprise mergers and acquisitions include economies of scale theory,synergy effect theory,market power theory,agency theory and management theory.Most of the foreign literature researches on the development strategy and growth cycle of the enterprise,while the domestic one focuses on the administrative and institutional reforms,which may be related to the relatively short development time of China’s capital market.After a brief introduction to the background of M&A,the motivation and timing of Midea Group’s acquisition ofLittle Swan were analyzed.The main reasons for the Midea Group’s merger and acquisition of Little Swan are:the integration of group resources,the expansion of market power,the elimination of connected transactions and the avoidance of competition in the same industry.Secondly,this article analyzes the market response of Midea Group after the merger and acquisition through the event research method.Finally,this article judges whether the merger has brought the enterprise by comparing the debt solvency,profitability,growth capacity and cash flow of the enterprise before and after the merger and operation analysis.Synergy in finance,operation and management.The research results of this paper show that the short-term merger and acquisition brings the excess return rate for Little Swan to be significantly higher than that of Midea Group,which provides arbitrage opportunities for Little Swan’s company shareholders.Midea Group’s privatization of Little Swan will deeply integrate Midea’s washing machine assets,and its brand structure will be more three-dimensional.After Midea Group acquired Little Swan,the financial synergy effect brought to the company as a whole is more obvious than that in operation and management.However,as Midea Group’s multi-category development plan is gradually completed,future synergies will become more apparent.Midea Group’s follow-up operation process should focus on enhancing the brand’s premium capacity,through the integration of M & A assets,and on the basis of unified product design,continue to play a multi-brand strategy to achieve synergy between business units.While cultivating high-end brands,we cannot ignore the market and growth rate that already have low-end and mid-end products.Overall,the merger successfully created value for Midea Group. |
