Research On Performance Of Aishi Shares And Youjiu Times M&A Case

Diversified merge&acquisition(merge&acquisition,M&A)has become one important mean for enterprises to improve their operating ability and value.More and more companies have begun to transform through diversified mergers and acquisitions to achieve the goal of improving their business performance.In 2014,Chinese government vigorously supported the development of the game industry.Aishi shares diversified mergers and acquisitions of Youjiu Times that year,and divested its loss-making coal assets in the following year and transformed it into a listed company with game research and development as its core business.However,three years after the merger of the company,there was a huge impairment of goodwill and a sharp decline in performance,the reasons for which are worth further study.This paper carries out a case study from three aspects,including the motivation of M&A,the performance of M&A and the reasons for the performance decline after M&A.First of all,the case process of the merger and acquisition of Aishi shares in the long time is analyzed,and the industry and enterprise background of both parties are introduced.Secondly,through the comparative analysis of the main operating indicators of the coal industry and the game industry,combined with the information of corporate announcements and other information,it reveals that the motivation of the merger of Aishi shares in the Youjiu Times is to improve the profitability of the enterprise based on the industry transformation.Analysis again,based on the analysis of financial indicators,respectively,with net profit,return on total assets profit margin,operating profit margin and cost,technical staff accounted for,r&d spending revenue share,intangible assets accounted for the proportion of total assets,market share and other indicators of financial performance,innovation performance and market performance,the results found after m&a performance after the first drop phenomenon.Finally,using the synergistic effect theory,this paper analyzes the reasons for the decline of performance after M&A.It is found that after the completion of the merger and acquisition of the coal assets of the company,the performance of the performance commitment period increased and the performance commitment was barely fulfilled,while the net profit of the listed company declined sharply after the expiration of the performance commitment.The main reasons are as follows:(1)High premium leads to huge goodwill impairment.The M&A premium of listed companies is about 41 times,much higher than the average M&A premium of the same industry.After the performance commitment expires,large goodwill impairment occurs,leading to a sharp decline in the company’s net profit.(2)After the acquisition,the company failed to realize the integration of human resources,senior executives with game industry background left the company,senior executives lacked experience in operating game enterprises,and the company was blind in decision-making,leading to the decline of the company’s net profit;(3)The new game products are not launched on time,and the upgrading speed of products in the online game industry is fast.The old mobile game of the company has entered the decline period,and the new game products are not launched on time,which leads to the decrease of the company’s net profit;(4)Synergistic effect fails to be realized.The listed company fails to realize financial synergistic effect,management synergistic effect and operation synergistic effect after merger and acquisition,which leads to a downward trend in the company’s net profit.The research of this paper has certain reference significance for other enterprises in traditional industries to carry out diversified merger and acquisition of game enterprises.