Research On Success Or Failure Of Z Company M&As

With the continuous improvement of C hina's capital market,M&A activity is increasingly becoming an important way for C hina's companies to gain a rapid development.C hina's M&A transactions have become increasingly active,a series of mergers and acquisitions of enterprises are continuously increasing.While more and more companies carry out M&A activities in order to expand their size and enhance their competitiveness,it is noted that most of them gain lower and lower efficiency,and this phenomenon worth further study.Completing the deal does not mean that the M&A activity is successful.If M&A activity ultimately increases shareholder's wealth and business efficiency,we will call that a successful M&A activity.And all of this,it is inseparable whether to conform the company's strategy,devite the motivation of the M&A,achieve the integration effect and complete the optimal combination of company management resources and so on.Based on the domestic and foreign scholars' research on the motives of M&A and the performance of M&A,combined with the synergistic effect,this paper studies the M&A performance of Z Company of China's construction machinery industry,and we can find whether it is successful in the series of M&As.Since Z Company started to acquire A in 2003,Z Company took the opportunity to develop and expand rapidly.Its' solvency,operating capacity,profitability,development capacity and comprehensive financial indicators are good performance.Then,through the study of B Company's M&A in 2008 and C Company's M&A in 2013,we found that the overall operating efficiency of the company showed a downward trend.And it is related with the company's rapid expansion of M&As strategy.Therefore,the purpose of this paper is to explore the reasons for the gradual decline of Z after the series of M&As and whether the M&As are consistent with the corporate strategies.This paper analyzes the capital operations of the M&A activities.We analyze the performance of Z Company after M&A activities from the aspects of financial capability analysis,comprehensive performance analysis and factor analysis,fingding the factor that the company's operating performance gradually declined and the latter M&As did not fully achieve the company strategies.Furthermore,the author uses the method of ratio analysis,factor analysis,and Du Pont System to analyze the comprehensive performance index of the enterprise and find out the main reasons of not achieving company's management goals in the middle and later of the M&A activities.The reasons are long-term loans increasing sharply,lack of receivables management,lack of cash and inventory managements,rosing sharply of Goodwill and period cost,shrinking of market share and so on.Finally,according to the above problems combined with the analysis of capital operations,we conclude that the lack of M&A motivations,the appropriate of the M&A targets,the improper time of M&A,the improper managements after M&A and the strategic mistakes of brand integration in Z Company M&A activities.And it ended in failure.I also put forward some recommendations for Z Company and the other companies in the industry.