An Analysis On The M&A Performance Of STATS ChipPAC's Acquisition By JCET

In recent years,with the deepening of globalization and the slowdown of China's economy,more and more Chinese companies have achieved rapid growth and overtaking through cross-border mergers and acquisitions.The integrated circuit industry is an important supporting and strategic industry related to national economy,people's livelihood and China's development.To respond to the requirements of national industrial transformation,it has become necessary to make the integrated circuit industry bigger and stronger.Since 2014,the global integrated circuit industry has entered a new wave of mergers and acquisitions.Encouraged by the government's policy of vigorously developing the IC industry,Chinese capital has participated in this international wave of mergers and acquisitions from scratch.IC packaging and testing industry is an important part of the integrated circuit industry,but most of the companies in the industry in China are in the sub-process mode,and they are at a relatively disadvantageous position in the international competition.The development mode of these companies needs transformation.Cross-border mergers and acquisitions can give domestic companies the opportunity to quickly learn advanced foreign technology,but also help domestic companies improve their overall competitiveness and voice.Among them,Jiangsu Changjiang Electronics Technology's takeover of Singapore STATS ChipPAC is a case of a typical Chinese company's cross-border mergers and acquisitions in this international merger wave.The total consideration of the merger and acquisition deal is approximately 780 million U.S.dollars.It is the first time that the Chinese A-share listed company has acquired the first-class packaging and testing company in the global integrated circuit industry and is also the world's largest integrated circuit packaging and testing industry control acquisition case in the past five years.This article takes Changjiang Electronics Technology as the research object,and conducts in-depth research on the M&A motives and performance of Changjiang Electronics Technology's takeover of STATS ChipPAC,providing valuable suggestions for cross-border M&A of other companies in the integrated circuit industry.This article uses the literature research method,the case study method,the incident research method,the financial index method and the principal component analysis method to carry on the comprehensive analysis to the motivation and performance of the Changjiang Electronics Technology takeover of STATS ChipPAC.This article first introduced the concept,common causes and evaluation methods of cross-border M&A.Then sort out and analyze the development of the integrated circuit industry at home and abroad,and the mergers and acquisitions in the integrated circuit industry.Then we introduced the case of Changjiang Electronics Technology's takeover of STATS ChipPAC from the aspects of participants'introduction,motivation analysis,and M&A process.Afterwards,an event analysis method,a financial index method,and a principal component analysis method were used to comprehensively analyze the performance of Changjiang Electronics Technology's takeover of STATS ChipPAC.It was investigated whether the acquisition of Changjiang Electronics achieved the expected goals.And we explore the progress of M&A through five aspects of finance,R&D and technology,market,operation and production.This study found that both the short-term performance and long-term performance have achieved good results.The short-term market performance of the M&A was better.The M&A event enabled the shareholders to obtain positive excess returns,and investors generally favored the M&A news.The medium and long-term performance of mergers and acquisitions remains to be improved.M&A has a short-term negative impact on Changjiang Electronics' profitability,growth capability and debt repayment ability,which has a positive impact on operating capability.With the progress of M&A integration,the positive effect of the synergies of M&As on the overall performance of the company will not be apparent until the third year after mergers and acquisitions.At the same time,through the analysis of a series of mergers and acquisitions in the financial,R&D and technology,market,operations and production,the strategic value of this merger has become increasingly prominent.Finally,through the case study of Changjiang Electronics Technology's takeover of STATS ChipPAC,we obtained four inspirations,including focusing on the choice of acquisition targets,innovative financing channels,strengthening the integration after M&A,and focusing on the risks in cross-border M&A.We hope this study could provide valuable suggestions for China's IC industry cross-border M&A.