Research On The Influence Of Industrial Policy On The Decision And Performance Of Jianrui Fire Strategic Acquisition

Industrial policy has always been an important means for the Chinese government to regulate and control the macro economy.Especially after the concept of "supply-side structural reform" was introduced,the debate on industrial policy issues became a hot topic.Affected by the adjustment of the national economic structure,mergers and acquisitions and reorganizations have become one of the ways for enterprises to pursue development.In the process of seeking strategic transformation or business transformation,many co mpanies' merger and acquisition decisions are more likely to be affected by industrial policies.And the acquirer is more likely to initiate cross-industry strategic mergers and acquisitions of target companies supported by industrial policies.Under the development concept of low-carbon and environmental protection,new energy vehicle technology is becoming increasingly mature,industry supporting facilities are constantly being improved,and the new energy vehicle industry has entered a stage of rapid development.China's central government has also promulgated a number of new energy vehicle marketing and fiscal and taxation support policies to encourage the promotion and application of new energy vehicles in various regions.In 2018,government department s made another adjustment to the subsidy policy for the new energy vehicle industry,with the aim of optimizing the subsidy standards for new energy vehicles.J&R Fire Protection(stock code: 300116)was listed on the Shenzhen Stock Exchange in 2010 and is mainly engaged in the production and sales of fire protection engineering and fire extinguishing equipment and fire early warning equipment.Optimum Nano was established in 2002 and is mainly engaged in the research,development,production and sales of n ew energy vehicle lithium batteries.On March 22,2016,J&R Fire Protection issued a merger and acquisition announcement,acquiring a 100% stake in Power Battery Enterprise Optimum Nano at a high premium of 5.2 billion yuan.Later,“J&R Fire Protection” was renamed “J&R Optimum Energy ”.However,one year after the completion of the merger and acquisition,J&R Optimum Energy accrued about 4.6 billion in impairment of goodwill.After that,its financial performance continued to deteriorate,fell into a finan cial crisis,and bankruptcy was announced at the end of 2019.This article takes J&R Fire Protection's M&A as an example,and mainly studies the impact of industrial policies on corporate M&A behavior.The research found that J&R Fire Protection mergers a nd acquisitions motivation was affected by new energy vehicle-related industrial policies.The company implemented a strategic transformation,Cross-industry mergers and acquisitions of Optimum Nano Corporation supported by industrial policies established a strategic layout of “fire safety + new energy”;After the announcement of the merger and acquisition,the cumulative excess yield continued to rise for several days,reaching a maximum value of 0.4407 on the fourth day,indicating that investors are opti mistic about the merger and recognize the relevant industrial policies of the target company;but three years after M&A performance research It was later found that the net profit dropped from 429,937,600 yuan to-3,945,916,600 yuan,and various indicators such as debt serviceability and operating capacity have fallen sharply,Moreover,the number of Z-value warnings decreased from 7.93 in 2015 to-0.86 in 2018,and the company's financial condition continued to deteriorate until bankruptcy and reorganization.The important reason for the above-mentioned unfavorable consequences is the adjustment of new energy vehicle-related industrial policies after the completion of the merger and acquisition,and the strategic mistakes caused by the merger's misjudgment of industrial policies.Therefore,this article suggests that the management of listed companies should treat industrial policies rationally;at the same time,supervisory departments should strengthen the supervision of listed companies' arbitrage of policy dividends.This article has enriched case studies in the field of industrial policy and mergers and acquisitions,and has certain reference value for decision-making by regulators and investors.