On Merger Performance Of Department Stores In China

In the case of regional barriers in the retail industry,mergers and acquisitions have become the main way for Chinese retail enterprises to achieve cross-regional expansion in recent years.Through the acquisition of some mature and growing companies or assets,to improve the core competitiveness of enterprises and achieve leapfrog development.However,whether the motive of M&A matches with its development strategy and whether M&A can improve the performance of enterprises have not reached a consistent conclusion.Therefore,it is of practical significance to analyze the motivation,performance and risk of M&A.This paper chooses Maoye merger and Victory merger,the first merger and acquisition event in retail industry in 2016,as the research object,and conducts case studies on its merger motivation,merger and acquisition performance and merger and acquisition risk.Firstly,the paper elaborates the background and significance of the topic,summarizes and reviews the views of domestic and foreign literature,introduces the framework and research methods of the paper,and then combs the motivation of M&A and related theories of M&A performance.The motivation of M&A includes synergy effect theory,agency theory,market power theory,etc.The evaluation methods of M&A performance include event study method,finance method,etc.Research methods,etc.However,scholars at home and abroad have not yet reached a unified conclusion on whether M&A can improve corporate performance.The existing research provides a theoretical basis and space for the case study in this paper.Secondly,it introduces the characteristics and current situation of the current department store industry,describes the current environment and future development prospects of the industry,and summarizes the basic situation of the merger and acquisition parties from two aspects of operation and financial situation.Thirdly,event study method,financial index method and non-financial index method are used to analyze the short-term performance,long-term performance and non-financial index performance of the case to judge the impact of M&A on the company.Finally,according to the results of the previous analysis,the paper summarizes the practical experience of the case,focusing on the opportunities and risks existing in the current industry,and gives the relevant countermeasures and suggestions for Maoye Business.Through the above analysis and research,this paper draws the following conclusions: Firstly,the M&A conforms to Maoye’s strategic planning,which is conducive to breaking the barriers between regions and speeding up the pace of transformation to a national Department store;secondly,in the short term,although the shareholders of the M&A party suffer negative wealth effects and the solvency of the enterprise decreases,their operational capacity,and so on.The profitability and growth ability have increased;third,a single payment method of M&A may increase the cost of M&A.In future M&A transactions,retail companies can adopt a variety of payment methods to reduce the cost of M&A and set up M&A funds to improve the efficiency of M&A;fourth,combined with the M&A risks in case analysis,provide suggestions for enterprises to improve: enterprises should make full use of them.Due diligence,improve performance commitment and profit compensation schemes to avoid the risk of M&A premium,while integrating existing resources to lay a solid foundation for enterprise development.