Analysis On The Reasons And Economic Consequences Of Baic Group’s Continuous Overseas Mergers

The automotive industry is at a critical stage of development in terms of technological change,industrial optimization and upgrading,and value chain restructuring.There are more and more mergers and acquisitions（M＆A）and restructuring among the automotive industry globally,and China’s automotive industry is also actively involved in M＆A and restructuring in the face of fierce market competition and industrial changes.As a state-owned enterprise and a leading player in the automotive industry,BAIC Group has launched many M＆A activities in the international market,and its successive M＆A experiences are representative and relevant.Therefore,this paper selects BAIC’s successive overseas M＆As as a case study to analyze what drives BAIC to undertake cross-border M＆As,which are more complex in terms of economic and policy environment as well as operational procedures,to investigate how BAIC’s overseas M＆A experience affects its subsequent economic consequences and whether the long-term and short-term economic consequences of successive overseas M＆As are consistent.Firstly,this paper briefly reviews and analyzes the development history and status of overseas M＆A and continuous overseas M＆A in China’s automotive industry based on relevant research on continuous overseas M＆A in domestic and international literature.Then,take BAIC Group as an example,introduce the case company,briefly review its many overseas mergers and acquisitions in recent years,and analyze the motives of BAIC Group after successive overseas mergers and acquisitions in conjunction with specific M＆A events.The analysis shows that BAIC is mainly motivated by the acquisition of technological resources,reduction of R＆D costs,expansion of scale to achieve synergy effects,and expansion of overseas markets.At the same time,the economic consequences of continuous overseas M＆A are often the focus of attention of enterprises and academic circles.This paper analyzes the short-term economic consequences of BAIC group’s continuous overseas M＆A by using event study method,and explores the impact of continuous overseas M＆A on its long-term performance by using financial index method and economic value-added analysis method.At the same time,it also combines the analysis of motivation and economic consequences,This paper analyzes the changes of R＆D innovation ability,management synergy and market share during the continuous M＆A period,and tests the practice of BAIC group on the motivation of M＆A.The study concluded that the short-term economic consequences of BAIC’s successive M＆As were on a downward trend,while the long-term indicators basically showed an inverted "U" shaped trend of increasing and then decreasing,the long-term economic consequences were decreasing.Finally,according to the case study of BAIC Group,it brings inspiration to Chinese auto companies that not every M＆A can bring positive wealth effect to the company,and the M＆A performance does not show a linear upward trend with the increase of the number of M＆As.Then,other auto companies in China’s auto industry should also plan and consider the number of M＆A activities,and should not carry out overseas M＆A activities blindly,which will help China’s auto companies to make better M＆A decisions and overseas investments in the future.The expected contributions of this paper are: firstly,the research perspective and case selection are relatively unique,and BAIC Group,which has not been studied by scholars for the time being,is selected as the case study object,which provides reference values for other automobile enterprises to carry out transformation and upgrading,overseas layout and improve international competitiveness,and enriches the research field and cases.Secondly,the research method is more comprehensive.It combines the motivation of continuous overseas M＆A with the evaluation of economic consequences for correlation analysis.It not only uses the event study method,financial index analysis method and EVA analysis to analyze the traditional financial indicators,but also analyzes the non-financial indicators such as enterprise innovation ability,which makes the evaluation of economic consequences of M＆A richer.