Research On The Performance Of Lenovo's Merger And Acquisition Of IBM X86 Business

Overseas mergers and acquisitions(M&A)is one of the means for enterprises to enter the target market,enhance enterprise value,increase efficiency and realize international operation.It has become an important way for Chinese enterprises to "go out".As a very representative IT enterprise in China,the development process of Lenovo is closely related to cross-border M&A,and its cross-border M&A activities are of great researching value.This paper focuses on the case of Lenovo's M&A of IBM x86 business,and analyzes the performance changes before and after that.First of all,this paper evaluates the short-term performance of Lenovo's M&A of IBM x86 business by using event study method.It is found that Lenovo has a positive cumulative abnormal return during the window period,and its short-term performance has been improved after the M&A.Secondly,this paper studies Lenovo's M&A of IBM by combining financial and non-financial indicators.In terms of the long-term performance of x86 business,Lenovo's operation ability,debt paying ability,profitability and development ability have declined to varying degrees after the merger.Instead,Lenovo's brand value,innovation ability and business diversification level have increased,butthe market share has significantly declined.As well,its brand influential ranking has little change compared with that before the merger.This paper holds that the overall effect of this M&A is not ideal in the long run,and there is still some room for improvement in its performance.Thirdly,according to the results of performance evaluation,this paper analyzes the causes of performance decline of Lenovo after M&A of IBM x86 business from both inside and outside of the enterprise,mainly including inadequate Research and development(R&D)capability,inappropriate timing,the management's overoptimistic attitude,the impact of mobile phone business,the shrinking PC market and competitors' handicaps.Last but not least,this paper puts forward suggestions to improve the performance of Lenovo,and obtains the enlightenment for overseas M&A of IT enterprises.The suggestions for Lenovo include improving its R&D ability,avoiding irrational decisions,adjusting its strategy and business focus,and attaching importance to M&A integration.The enlightenment is to choose the right time for M&A,focus on long-term performance improvement and look at the past experience scientifically.