On The Motivation And Performance Of M & A From The Perspective Of Industrial Integration

The economic downturns since 2018,there have been many mergers and acquisitions between listed companies in the capital market.These M&A have shown the logic of industrial integration.At the same time,due to the persistent overcapacity and unreasonable structure in the development of China's industrial economy,the state has introduced many policies to encourage enterprises to achieve industrial integration and upgrading through mergers and acquisitions.Industrial integration is not only a national policy,but also a strategic choice for corporate mergers and acquisitions.In order to more accurately understand the current situation of M&A based on industrial integration in China,this paper analyzes the motivation and performance of such mergers and acquisitions in detail,explores the impact of corporate M&A on industrial integration and provides reference for capital market M&A.Jiangxi Copper is the non-ferrous metal industry's highest-earning listed company in 2018,and it is also a national copper production base.In 2019,it buys Shandong Humon at a price of nearly 3 billion.Behind it is the idea of industrial integration.This paper selects the case of M&A between these two listed companies,and uses case analysis to prove the connection between industrial integration and M&A,and provides new ideas for industrial integration for corporate M&A.Based on sorting out the related theories of industrial integration and M&A,and explaining the relationship between them,this paper analyzes the motivation of Jiangxi Copper's M&A from four aspects in combination with the characteristics of the non-ferrous metal industry.This M&A not only conforms to the state's policy of encouraging M&A to achieve industrial integration,but also conforms to the development law of the non-ferrous metal industry with overproduction and the need to optimize the industrial structure.At the same time,Jiangxi Copper is aware of the lower M&A costs that the market can bring down and seize market opportunities.More importantly,M&A is expected to bring synergy effect and improve the gold development platform,which will help increase the market share and concentration of Jiangxi Copper in the non-ferrous metal industry,thereby achieving industrial integration.Together with the use of Shandong Humon's advantages in green development resources and technological innovation capabilities,it enhances the competitiveness of enterprises and can further integrates advantageous resources.For the industrial integration effect of this merger,it analyzes from three aspects: market reaction,industry competition,and short-term synergy effect.The industry competition mainly compares the changes in market share and industry concentration before and after the merger.The synergy effect is carried out from three aspects: operation synergy,management synergy,and financial synergy.Both market response and industry competition have shown that this merger and acquisition has produced a certain positive effect on industrial integration,but in terms of operation synergy,management synergy,and financial synergy,further management is needed to improve the long-term integration effect.The research on the case confirms that the environmental background of industrial integration encourages enterprises to make strategic arrangements for M&A.At the same time,M&A can promote the integration and development of the whole industry by expanding the scale of the enterprise,improving the core competitiveness and market concentration.Therefore,mergers and acquisitions based on industrial integration have broad reference significance for other enterprises,and may also become a kind of thinking and development trend of capital market in future.However,in such mergers and acquisitions,attention should also be paid to potential risks,that is,losses caused by peer competition and unfavourable integration.In summary,the case of Jiangxi Copper's M&A provides inspirations and suggestions for other enterprises: Firstly,they should pay attention to the strategies of M&A,avoid paying too much attention to short-term performance to ignore long-term strategies,and select companies with intrinsic value;Secondly,be sensitive to the national policy and the trend of the capital market,and grasp the timing of M&A;Thirdly,strengthen subsequent integration management to enhance the effectiveness of synergies.