Analysis On Corporate M&A Performance

In recent years,the government has proposed the slogan of energy conservation,environmental protection and green development so as to promote the development of the new energy vehicle industry.The new energy vehicle industry has become a booming new field,and many companies will focus on this field in the future development.Some traditional industries start to show excessive capacity and slow profit growth due to their own development constraints.Therefore,some companies in traditional industries will carry out strategic transformation through mergers and acquisitions aiming to achieve sustainable development.The M&A of emerging fields that are greatly supported by the government have become the preferred strategy of many companies in the traditional industry,which also result in the booming cross-industry M&A.Based on this background,this thesis analyzed the cross-industry M&A by taking Dowstone’s Acquisition of Qingdao Haoxin New Energy Technology Co.,Ltd.and Guangdong Jiana Energy Technology Co.,Ltd.as research objects.Dow Technology that originally engaged in the ceramic construction industry(a traditional industry)achieved its strategic transformation from pure ceramics to new energy materials through the cross-industry M&A.First of all,this thesis introduced research background and significance,and analyzed motivation and performance of M&A by combining related domestic and foreign literatures.Then,the M&A case was introduced together with the actual situation,M&A process and relevant industry development,and four motivations of M&A were concluded as follows by combining the industry background and current development of companies: 1.rise of new energy industry;2.support of government policy;3.diversified development promote to seek for new profit growth point;4.barriers in traditional industries,and fast access to emerging markets.Further,the financial index evaluation framework was designed based on the existing researches and the research objective in this thesis to analyze performance of M & A via factor analysis method.It was concluded that M&A could improve some performance in a short term from the vertical perspective,but the overall performance had not been increased.The financial index method was used to conduct horizontal comparison on companies in the same industry so as to further evaluate performance of M&A.It was found out that the acquisition of new energy materials companies could better improve performance than those in the same industry.Later,this thesis explored reasons for problems existed in subsequent integration of merger and acquisition.Meanwhile,the non-financial index method was adopted to evaluate the long-term integration effect of M&A.It can be known that the continuous investment in R&D resources of companies with a clear layout and an explicit development direction could improve its added value,stabilize its customer resources and bring out a bright prospect.Finally,this thesis proposed suggestions in regard to subsequent integration after M&A by combining financial performance analysis and non-financial performance analysis,including adjusting the financing method,strengthening the management ability of accounts receivable and inventory,consolidating the development of the original ceramic industry,and guarding against risks related to corporate operation.