Analysis Of Synergy Effect Of Merger And Acquisition Of Monarch Sanitary Ware & Oceano

Since the 1980 s,China’s national economy has continued to develop well,and the home building materials industry has developed rapidly.But in recent years,with the global economic downturn,the home building materials industry has faced many problems such as overcapacity,fierce competition,and a highly fragmented industry.Under the influence of the country’s increasingly stringent environmental protection compliance inspections,the upgrading of national consumption,and the enhancement of consumer brand awareness,a large number of low-end production capacity in the industry will be eliminated,and industry concentration will inevitably increase.Enterprises in the household building materials industry such as bathroom are urgently facing new breakthroughs and new transformations.At present,M & A has become an important way for Chinese enterprises to seek rapid development.Obtaining M & A synergies is one of the main purposes for enterprises to carry out M & A activities.Whether to obtain M & A synergies is the key to measuring the success of M & A.In-depth research on M & A synergies will help companies adjust their M & A strategies and improve their competitiveness.In 2017,sanitary ware company Monarch Sanitary Ware M & A ceramic company Oceano has a certain representativeness and demonstration in many mergers and acquisitions.The research done in this paper helps to enrich the case study of merger and acquisition synergies.The realization of synergy in China has certain practical significance.This paper sorts out the literature on M & A synergy,uses relevant theories as the research basis,analyzes the realization of M & A synergy in case companies by using financial index method and EVA method,and evaluates its possibility from three aspects:operation,management and financial synergy To achieve the synergy effect,use the EVA model to evaluate the overall synergy effect of the merger and acquisition case,and draw inspiration for companies in the home building materials industry to achieve synergy in mergers and acquisitions.The analysis in this paper found that M & A of Monarch Sanitary Ware and Oceano has achieved full synergy.Although the M & A only achieved a limited cost of capital in terms of financial synergy,the market expectation effect and tax saving effect were not realized,the solvency decreased and the financial risk increased,but through this M & A,the company achieved a strong operation Synergies and good management synergies have improved profitability,growth capability,expense management and asset management after M & A.Overall,the EVA of Monarch Sanitary Ware after M & A is significantly greater than the simple addition of the respective EVA of Monarch Sanitary Ware and Oceano before M & A.The two parties have deeply integrated and shared resources after M & A,forming a linkage and coordinated development.Case enlightenment is drawn from the three aspects of M & A target selection,M & A acquisition method selection and M & A integration: enterprises in the home building materials industry must select appropriate target companies for M & A activities,and fully consider whether the qualifications of the merged and acquired companies are consistent with their strategic goals;Scientifically assess its own asset level,determine a reasonable acquisition method;optimize the marketing model,and establish an omni-channel integrated sales network.