Research On The Motivation And Performance Of Merger And Acquisition:Haowu Corp. Acquired Direction Corp.

Under the background of globalization,the market competition becomes more and more fierce,which puts forward higher requirements for the endogenous growth or extension expansion of enterprises.As a means for enterprises to achieve growth or expansion,Merge and acquisition(M&A)can improve production efficiency internally and establish market position externally.In China,there has been a wave of M&A in the auto industry in recent years that earn profit relying on large-scale operation.However,for M&A with state-owned enterprises being participants,whether it is affected by the policy factors or resulted economic consequences still remains unclear.Even more importantly,as compared to common market subjects in M&A,state-owned enterprises might demonstrate more complex behaviors,implying that it is necessary to select typical cases in order to make an in-depth study on M&A motivations and M&A performances.On the basis of introducing the research background and significance and summarizing the relevant theories and literatures,the paper firstly discusses the main motivations and the measurement approaches of performance in M&A.Secondly,taking the case that Haowu Corp.acquired Direction Corp.as the subject,combining with the review of the M&A process,the paper discusses the M&A motivation of Haowu Corp.with state-owned enterprise background from two aspects of external environment and internal motivation.Finally,from the business,strategic and financial levels,combined with quantitative evidence,the paper analyzes the "win-win" performance brought by M&A to both sides of the transaction,and puts forward management enlightenment and policy suggestions accordingly.Specifically,the conclusion of the case study shows that the dominant motivation of Haowu Corp.is to acquire cheap shell resources,quickly enter into the capital market,and gain industry status by using the platform of listed company.The main motivation of Direction Corp.is to resolve the delisting risk and bankruptcy dilemma.Furthermore,from the perspective of M&A performance,Direction's financial status,including solvency,profitability and development ability,has been greatly improved after M&A.In the meantime,Haowu's financial performance kept stable after the M&A,and its M&A performance was improved mainly in non-financial indicators of the corporate governance structure,e.g.,integrating the stock resources simultaneously,getting through the path of assets securitization,extending the industrial chain,getting the policy support from the local government and expanding the business layout to southwest.On the whole,the M&A target of backdoor listing and the overall improvement of market competitiveness are well realized.In addition,during the whole process of M&A,the government's promotion role in the process of paying off the debts of Direction Corp.not only directly contributed to the completion of the M&A,but also invisibly enhanced the market competitiveness of Haowu Corp..