PE Helps Zoomlion’s Strategic Transformation

With the rapid development of the global economy,companies must always avoid becoming products eliminated by the market.In the face of diversified development methods,more and more companies choose to merge.While mergers and acquisitions must meet the needs of a large amount of capital preparation and capital operation,the emergence of private equity investment institutions(Private Equity)has effectively solved this problem.The capabilities that PE possesses include mining the corporate value of the acquired party,establishing and formulating M&A strategies,optimizing the internal management of the acquiring party,and integrating the resources of both parties after M&A,which can effectively implement the development strategy of the company.This article takes Zoomlion’s strategic plan to acquire Chery Heavy Industries and completes the goal of entering the agricultural machinery industry in conjunction with PE to implement the strategic plan for the acquisition of Chery Heavy Industries in the downturn in the large industrial machinery industry market.result.The conclusions reached include: First of all,the industrial machinery industry is cold and the agricultural machinery market has great potential,which provides strong conditions for Zoomlion to implement the transformation strategy of the prepared plan,and it has the strong support of PE to promote the growth of the largest agricultural machinery in China.Mergers and acquisitions;secondly,this strategic merger was successfully realized through the dual roles of PE,which played the role of private equity institution fund providers and transaction participants.In the early communication with the parties to the merger and the integration of the latter,PE also actively participated;finally,through the event research method and financial indicator analysis method,the economic effects of the merger and acquisition event were clarified in terms of market response and corporate financial performance: During the window period,Zoomlion’s earnings were in good condition.It reflects the continued optimistic intentions of investors;the strategically introduced agricultural machinery module has also become a new profit growth point for Zoomlion,indicating that the effect of Zoomlion’s merger and acquisition is improving and the strategic development plan has been initially realized.This article analyzes the effect of the merger of Chery Heavy Industry after its acquisition by Zoomlion,as well as the in-depth analysis of the dual roles of PE as an intermediary and transaction party in this merger,and provides a more diverse market.The way of mergers and acquisitions has also activated the market to some extent,which has practical and guiding significance.