M&A Performance Of Great Wall Movie And Television Co.,Ltd

With the continuous development of the market economy in recent years,our country has paid more and more attention to the cultural industry.Encouraged by the government's multiple policies,China's cultural media industry has achieved rapid development.At the same time,the competition between enterprises is also becoming increasingly fierce.There are generally two ways for enterprises to expand: intensive development and extensive development.Intensive development requires enterprises to improve operating efficiency and enhance core competitiveness through their own creativity,while the extensive development can take advantage of M&A to obtain the resources needed.Compared with intensive development,enterprises can expand more rapidly by M&A.Therefore,many cultural media enterprises generally choose M&A to expand their business scale rapidly and enhance their market competitiveness in order to cope with the rapid changes in the external market environment.So,more and more enterprises take the form of mergers and acquisitions.And in order to achieve the goal of rapid expansion in a short period of time,some enterprises will appear continuous merger and acquisition behavior.At the same time,compared with a single merger and acquisition,there are still few studies on consecutive merger and acquisition events in China.Therefore,the selection of the case of the continuous merger and acquisition of Great Wall Movie and Television Co.,Ltd has theoretical and practical significance.This paper adopts the method of literature research and case analysis.In terms of literature research,this paper has sorted out relevant literatures at home and abroad,and the research shows that there are many reasons for enterprises to carry out continuous mergers and acquisitions.The change of the external environment ? expanding enterprise scale and overconfidence in management will force the enterprise to engage in serial mergers and acquisitions.In terms of the performance of continuous M&A,the payment method of continuous M&A,the behavior of management and other factors will have an impact on the performance of continuous M&A.And in terms of case analysis,this paper selects the case of continuous merger of Great Wall Movie and Television Co.,Ltd as the research object.Firstly,this paper introduces the situation,characteristics and reasons of the previous mergers and acquisitions of Great Wall Movie and Television Co.,Ltd.Then it analyzes the changes in the performance of Great Wall Movie and Television Co.,Ltd,and further explains the reasons affecting the performance of continuous mergers and acquisitions of Great Wall Movie and Television Co.,Ltd.Finally we come to the conclusion and the enlightenment of this case for enterprises that intend to make continuous mergers and acquisitions in the future.Continuous M&A refers to frequent M&A activities in a short period of time.There are many factors influencing the performance of an enterprise's continuous M&A,including the selection of the target company,the payment method of the continuous M&A,the performance commitment of the continuous M&A and the integration after the M&A.In order to analyze the impact of continuous merger and acquisition of Great Wall film and television on corporate performance,this paper mainly uses financial ratio analysis and economic value added method to calculate relevant financial indicators.At the same time,combining the three theoretical bases of synergetic effect theory,transaction cost theory and market power theory,this paper further analyzes the motivation and performance of enterprises to carry out continuous mergers and acquisitions,providing a theoretical basis for the case study of this paper.Great Wall film and television is a film and television culture enterprises.In 2014,Great Wall film and television completed a major asset restructuring,successfully backdooring Jiangsu Hongbao,which is also known as the "film and television backdoor first stock".In order to rapidly expand the scale of the enterprise,achieve high growth and improve the strategic layout of the enterprise,Great Wall film and television launched two mergers and acquisitions immediately after its successful listing,and acquired 18 companies in the following four years.Since the targets of Great Wall's mergers and acquisitions are asset-light enterprises,except for the two related party mergers and acquisitions,the remaining 16 companies are all mergers and acquisitions at a high premium.In addition,in order to quickly complete the merger and acquisition activities,the company also adopts the cash payment method when the merger and acquisition.This paper mainly analyzes the performance of the continuous merger and acquisition of Great Wall Movie and Television from the aspects of market,operating efficiency and shareholder wealth.From the perspective of market,the change of the total market value of Great Wall Movie and Television Co.,Ltd after its listing indicates the impact of its continuous M&A on its market performance.From the perspective of operating efficiency,the indicators of debt paying ability,profitability,operating capacity and growth capacity were analyzed.From the perspective of shareholders' wealth,the changes of economic value added are calculated to analyze the performance of their continuous mergers and acquisitions.And further explained the reasons of impacting the performance of Great Wall Movie and Television Co.,Ltd M&A.At the same time,this paper further analyzes the reasons that affect the continuous M&A performance of Great Wall film and television,including the capital pressure brought by cash acquisition,the new risks brought by performance commitment,the neglect of the construction of core business and the unsatisfactory integration effect after merger.From the above case analysis,the following conclusions are drawn: In the short term,the financial effect of Great Wall Movie and Television Co.,Ltd increased in the process of continuous mergers and acquisitions.However,continuous mergers and acquisitions gradually weakened the solvency of Great Wall Movie and Television Co.,Ltd and increased the risk of goodwill impairment.And the wealth effect brought by successive mergers and acquisitions of Great Wall Movie and Television Co.,Ltd gradually decreases.Although the development speed of the cultural media industry has slowed down in the past year,both the return on equity and the growth rate of operating income of Great Wall Movie and Television Co.,Ltd have been lower than the average of the industry.It indicates that continuous merger and acquisition have not had a positive impact on Great Wall Movie and Television Co.,Ltd.At the same time,by analyzing the case of continuous merger of Great Wall Movie and Television Co.,Ltd,this paper draws a conclusion that enterprises should fully consider the payment method,consideration of merger and acquisition,post-merger integration and other factors when carrying out continuous merger and acquisition.So as to ensure that continuous merger and acquisition can bring expected benefits to enterprises.