The Research On The Movtivation And Performance Of The Acquisition Of Teenie Weenie By V'GRASS

Clothing consumption accounts for 6.5% of China's household consumption,and China's high-end women's wear industry is growing rapidly.However,compared with developed countries,there is still a gap in scientific and technological research development,brand building and other aspects.As one of the representatives of China's high-end women's wear industry,VGRASS began to acquire brand-related resources through cross-border brand mergers and acquisitions to optimize product structure,expand market share,and finally achieve 1+1>2 synergies.However,it chooses the weak merges with strong acquisition mode like “snake swallowing elephant”,which brings development opportunities to the enterprise and also makes the enterprise face huge debt risks.Therefore,it is necessary to study this modal.This paper takes the “snake swallowing elephant” cross-border brand merger and acquisition enterprise VGRASS as an example,uses the theory of synergy,transaction cost,market power,order financing and complementary advantages to make a theoretical analysis of the merger and acquisition activity of VGRASS in its acquisition of south Korean clothing brand Teenie Weenie.The short-term market reaction of the merger of VGRASS was analyzed with the event study method;the economic effect of the merger of VGRASS was analyzed with the economic value added model.Also,the financial index analysis method was used to analyze the performance of VGRASS after the merger.The operation risk,debt paying risk and integration risk of the merger of VGRASS were summarized based on the theoretical analysis.The research shows that after the transnational brand merger and acquisition,the short-term performance of VGRASS is good,but its valuation level,financing method and payment method have a negative impact on the long-term performance.The research of this paper riches references of the field;besides,is helpful for enterprises to choose a reasonable payment method,optimize the financial capital structure,strengthen the cash flow management.The paper improves the financial risk control mechanism of M&A,pays attention to the integration of M&A resources,improve their independent research and development ability.Meanwhile,the paper believes that governments should encourage diversified payment methods and expand financing channels for enterprises.