A Study On Synergistic Effect Of Cross-border Acquisition Of Pirelli By Chemchina

The rubber industry,Petroleum chemical industry,Pharmaceutical manufacturing and Chemical fiber resource processing industry,as a kind of manufacturing industry in China,its high-quality development plays an important role in promoting the development of China’s social economy.In recent years,with the boom of M＆A in China’s market,the results are often unsatisfactory M＆A benefits.The development of processing industries,such as Rubber,seems to have hit a bottleneck.In order to ensure high-quality development,enterprises must create brand advantages and seek technological innovation while maintaining good product share in the domestic market,that is to say,they must achieve good performance in overseas M＆A.Therefore,this paper selects CHEMCHINA,which is mainly engaged in Rubber tire and Petroleum refining business,to analyze the synergistic effect of its cross-border acquisition of Pirelli.This paper analyzes the process and motivation of The M＆A of Pirelli by CHEMCHINA,and finds that Through this M＆A activity,CHEMCHINA can obtain brand advantages and realize diversification,and Pirelli can also expand the Asian market and avoid peer erosion.As for the operation mechanism of synergistic effect of CHEMCHINA’s acquisition of Pirelli,this paper predicts and analyzes the short-term effect and long-term effect.Then,the author uses the event study method to study the short-term synergies of M＆A events through three steps:determining the event period,constructing the expected rate of return model and feasibility analysis,and analyzing the excess return rate and cumulative excess return.The paper then uses the index analysis method and EVA evaluation method to study the long-term synergistic effect of M＆A events.Firstly,through the analysis of index selection principle and the confirmation of primary index and secondary index,specific index analysis results are obtained;then,EVA comprehensive evaluation is carried out.In the evaluation process,adjusted value of each factor is used to reduce the influence of traditional enterprise performance indicators as far as possible,so as to accurately reflect the enterprise’s business performance and draw a more reliable conclusion of synergistic effect.Through the above research and analysis,the paper finds that CHEMCHINA’s acquisition of Pirelli has a significant short-term synergistic effect,but does not have a significant longterm synergistic effect;At the same time,the paper also explored the reasons for the significant short-term effect and the insignificant long-term synergistic effect of The acquisition of Pirelli by CHEMCHINA.Finally,based on the research conclusion of The Cross-border acquisition of Pirelli event of CHEMCHINA,the author puts forward the following suggestions for enterprises to carry out overseas M＆A: Pay attention to diversified integration methods in the process of M＆A to reduce the operating risks caused by insufficient debt paying ability;After the completion of M＆A,enterprises must pay attention to the integration of quantity and quality,improve the operating capacity of enterprises,reduce management costs;Also can introduce related technical personnel,improve the management system,in order to achieve the purpose of improving management efficiency.