Case Study Of East Guo Xin Acquiring Yi Tong Information

In recent years,the new OTC market has developed rapidly.There are more than 10,000 companies gathered in the new OTC market,most of them are high-tech enterprises.The companies in the new OTC market have many advantages,such as information disclosure and operating specifications,which are the target of the listed companies want to acquire.There are more and more mergers and acquisitions between listed companies and companies of the new OTC market,however,the success rate of mergers and acquisitions is getting lower and lower.East Guo Xin acquiring Yi Tong Information is a relatively successful case.East Guo Xin is a listed company,which is in the leading position in the field of big data.Yi Tong Information is company of the new OTC market,which is in the leading position in both financial BI and mobile Internet field.After the acquisition,Yi Tong Information has achieved its performance promise for three consecutive years,so this case is typical and representative.This paper analyzes the risks and performance of East Guo Xin acquiring Yi Tong Information,to discover the risks of mergers and acquisitions,give some suggestions,and learn the successful experiences of mergers and acquisitions.At last,this paper also provides enlightenment for the same type of mergers and acquisitions.This paper analyses the current situation and reasons of the mergers and acquisitions between listed companies and companies of the new OTC market,found that the number and scale of mergers and acquisitions constantly expanding,mainly due to the listed company self-development,the cost is lower,and the companies of the new OTC market need to solve the liquidity problem and valuation issues.Then,this paper introduces basic information of this case briefly.Based on this case analysis,first,through risk analysis,it is found that the risk of this case including transaction risk,goodwill impairment risk,enterprise tax risk and integration risk.Then,through the performance analysis,it is found the case has good market reaction,and create wealth for shareholders.After the acquisition,it is found that the overall performance of the main financial indicators is good,profitability improved significantly,long-term solvency increase,Yi Tong Information complete the performance commitment over three consecutive years.After the acquisition,two companies become better and better,it is a good performance of this case.The performance of this case is increasing rapidly,and the risk of mergers and acquisitions is reduced to a certain extent.Finally,for the risk and performance problems in this case,we can take measures,such as improve profitability,tax planning and integrate resources effectively.In this case,the risk prevention measures control the risk effectively,including restricted transfer shares risk,high valuation risk,raise funds risk and default risk.From this case,we can get the following enlightenment.First,terminate from the OTC market,lifting the restrictions on the transfer of shares.Second,raise matching funds,and open up the financing channels.Third,use reasonable methods to assess the value of assets,and sign the performance commitments.Fourth,develop a reasonable way of payment,to avoid default on performance commitments.The enlightenment from this case is helpful to solve similar risk problems and performance problems of mergers and acquisitions between listed companies and companies of the new OTC market in the future.