Research On The Financial Performance Of Transnationalleveraged M&A

In the 1980 s,leveraged mergers and acquisitions arose in western developed countries represented by the United States.After decades of development,leveraged mergers and acquisitions as an efficient merger and acquisition method gradually matured.However,compared with western developed countries,leveraged mergers and acquisitions appeared relatively late in China,and leveraged mergers and acquisitions under the environment of Chinese characteristics have certain differences compared with leveraged mergers and acquisitions in the western market.With the pace of Chinese enterprises' cross-border mergers and acquisitions,leveraged mergers and acquisitions that require less of their own funds have begun to be used more.In this environment,the research on leveraged mergers and acquisitions has certain practical significance.The case of Xiwang Foodstuffs' merger with Kerr selected in this article completed the first phase of the purchase with a consideration of 3.932 billion yuan using only 688 million yuan of its own funds.The loan accounted for 68.16% of the total funds.The proportion of funds is small,which is in line with the definition of leveraged mergers and acquisitions of target companies using financial leverage to borrow heavily.Based on a review of the literature on overseas M&A,leveraged M&A,and M&A performance,this article uses a case analysis method,taking West King Foods' acquisition of Kerr in Canada as an example,and combines financial and non-financial indicators to analyze the financial performance of leveraged M&A.This article starts with theories of cross-border leveraged mergers and acquisitions and performance evaluation,and outlines the characteristics of cross-border mergers and acquisitions and the status and problems of leveraged mergers and acquisitions in China.Then it analyzes several evaluation methods of M&A performance,and selects event analysis method,financial indicator analysis method and non-financial indicator analysis method for the case.After reviewing the case of Xiwang Foodstuffs' merger with Kerr,this article uses the event analysis method and the financial indicator analysis method to analyze the short-term performance and long-term performance of the case,and also uses the non-financial indicator analysis method to analyze the financial performance.supplement.In the end,it was concluded that this merger and acquisition event meets the definition of leveraged mergers and acquisitions,which has brought a greater negative impact on the company in terms of debt repayment and operating capabilities.Capabilities and growth have brought significant improvements to the company.Not only that,this acquisition also allowed Xiwang Foodstuffs to open up new products and markets,improve the overall quality of employees,strengthen research and development capabilities,and promote the implementation of corporate strategies.In general,the M&A incident has brought a positive effect on Xiwang Foodstuffs and provided a certain reference for transnational leveraged mergers and acquisitions of Chinese enterprises.