A Study On M&A Motivation And Economic Consequences Of Dahua Intelligent Company

The “M&A paradox” of companies in the capital market has always been an incomprehensible phenomenon,that is,the company has paid a huge price to implement mergers and acquisitions,but in the long run,it has not increased or even reduced the shareholders' wealth.Even so,the wave of mergers and acquisitions remains strong.This paper attempts to explore the possible answers to the “M&A Paradox” by analyzing a series of caterto-market M&A behaviors and subsequent major shareholder reductions of Dahua Intelligent in 2013-2018.This paper first analyzes the tendency of Dahua's three-time mergers and acquisitions to cater to market preferences,and combines the major shareholder's urgent reduction behavior after mergers and acquisitions to judge the short-selling motives of major shareholders behind mergers and acquisitions,and based on this analyze the economic consequences of cater-tomarket mergers and acquisitions..In terms of stock market performance,the event research method is used to judge whether the company's stock price has experienced extraordinary growth after the merger.In terms of actual operation,the company's real business performance is analyzed based on the particularity of the cater-to-market mergers and acquisitions.Finally,in the context of the final share price collapse of Dahua Intelligent,the loss of interest of small and medium shareholders during this period was analyzed.Through the above analysis,it is concluded that: First,there may be motives for large shareholders to short-sell after mergers and acquisitions that cater to market preferences,and the advantages of control rights and internal information advantages of large shareholders make the short-selling behaviors multiplied;second,in Under the current capital market environment in China,the blind pursuit of market hotspots can lead to a rapid increase in the company's stock price,but the market-oriented M&A behavior will have a negative impact on the company's real business performance,which will easily lead to the company's stock market value deviating far from its True intrinsic value,this capital market mispricing gives big shareholders the opportunity to reduce arbitrage;third,the decline in post-merger performance and the reduction of major shareholders directly lead to the risk of stock price collapse,in the process,the major shareholder can obtain excessive returns,while small and medium-sized shareholders have to bear the consequences of very little dividend distribution,rapid decline in stock prices,and serious damage to the company's long-term value.