The Impact Of Listed Companies’ Share Exchange Absorption Merger On Performance

The iron and steel industry has always been an important basic pillar industry in the national economy.In recent years,the development of China’s steel industry has been hindered due to the overall high debt ratio,serious overcapacity and low industrial concentration.In order to promote China’s steel industry to optimize the allocation of resources and promote the optimization and upgrading of industrial structure,the central government proposed supply-side structural reform at the end of 2015,with the steel industry as the focus of the reform.The state encourages steel enterprises to promote the upgrading of industrial structure through mergers and reorganizations,which can not only promote the degree of industrial concentration,but also give play to the scale effect and synergistic effect,improve the overall profitability and enhance market competitiveness.The merger and reorganization of enterprises can not only achieve scale expansion and improve market share in a short term,but also optimize and integrate the production,management,research and development resources among enterprises,so as to improve the overall profitability.Taking baosteel’s stock-exchange absorption and merger of wuhan iron and steel as an example,this paper mainly analyzes the market performance and financial performance of baosteel’s stock-exchange absorption and merger of wuhan iron and steel.Firstly,through the research and sorting out the relevant literature and theories at home and abroad,this paper summarizes the relevant theories of merger and acquisition,sorts out the research results on the way,motivation and performance of stock-exchange merger and acquisition,as well as the impact of stock-exchange merger and acquisition on enterprise performance.Then,it analyzes the background of baosteel’s share-for-share absorption and merger with wisco,summarizes the basic situation of the two companies,and introduces the specific process of the merger in detail.Then,from the perspective of resource allocation optimization,improvement of international competitiveness,improvement of profitability and promotion of national policies,this paper analyzes the motivation of baosteel’s stock-for-stock absorption and merger of wisco,and discusses the motivation of selecting stocks as consideration payment.Then,the combined market performance and financial performance are analyzed by using the event study method and the financial index method.Specifically,based on the stock price changes before and after the merger,the accumulative excess return rate of baosteel and wisco CAR was calculated,and the attitude of investors towards the merger of baowu in the short-term capital market was evaluated based on CAR.According to the changes of financial indicators in a total of 4.5 years from 2015 to June 2019,the financial conditions of profitability,debt paying ability,operation ability and development ability of baosteel after its stock-for-stock merger with wisco were compared horizontally and vertically,and the impact of the merger on the financial performance of both sides was measured.The research in this paper found that,from the perspective of short-term performance,the merger increased the value of enterprises,market participants to baosteel share-for-share absorption and merger of wisco expressed recognition.Share swap absorption merger performance from a long-term point of view,baosteel,wisco long-term solvency and profitability have been improved,development ability and operation ability still need to adhere to the reform of the supply side,insist on r&d input,strengthen innovation ability,improve the core competitive power of enterprises,strengthen the resource integration and improve asset utilization efficiency and quality.On the supply side,therefore,structural reform and the reform of state-owned enterprises under the background of reality,baosteel and wuhan actively comply with the government’s policy to carry on the merger,acquisition and reorganization,now m&a behavior is conducive to the development of the two companies,the steel industry for the future pointed out the direction of enterprise development and industry evolution,for large enterprises in a supply side reform merger provides reference.