Research On The Economic Consequences Of BOE Frequent Overseas Mergers And Acquisitions

The "The Belt and Road" initiative has accelerated the pace of Chinese enterprises to "go globally".Due to the obstacles in information,management concept and communication caused by cross-region,cross-culture and cross-language factors,overseas mergers and acquisitions face many challenges,with the drastic changes in the global trade,regulatory,financial and other environments,as well as the continuous evolution of Chinese companies’ own management models,there is great uncertainty in the results of overseas M&A.BOE,one of the typical companies actively implementing overseas M&A in my country,has started the process of overseas M&A since the beginning of listing.Since 2015,it has successively completed the M&A of BTEG,Varitronix and SES for three consecutive years.The frequent overseas M&A have further promoted the implementation of BOE’s transformation exploration and overseas expansion strategy.Based on the introduction of BOE’s general situation and its frequent overseas M&A process,this paper analyzes the motivation of BOE’s M&A.The main reasons for BOE’s M&A are as follows:external motivation comes from the call of national "The Belt and Road" policy,while internal motivation includes seeking technical cooperation,controlling product cost and promoting business transformation.At the same time,this paper studies the economic consequences of this frequent overseas M&A from two aspects of performance and risk.First,use the DID to study the impact of M&A activities on BOE’s performance.The study found that M&A activities have a significant negative effect on BOE’s corporate performance,and the negative effect has hysteresis.Secondly,using the event study and the EVA method to further study the changes in corporate performance,the results show that M&A activities have reduced BOE’s short-term and long-term performance.M&A activities have brought a relatively large negative impact on BOE,which may also bring risks while reducing performance.This paper analyzes potential risks in a chronological order.Before the implementation of the M&A,BOE may face the risk of goodwill depreciation due to the overvaluation of the target company’s value,the financing and payment methods in the implementation stage of the M&A may cause financial risks,after the M&A is completed,the company unable to achieve the expected synergy,which may lead to synergistic integration risks.Finally,the conclusion is drawn that the frequent overseas M&A have brought negative economic consequences for BOE: M&A activities not only reduce performance,but also bring potential risks.Based on the research conclusions,some suggestions are put forward for other enterprises that plan to carry out the frequent overseas M&A.