Research On Synergy Effect Of Sunwave Communication M&A

M&A is an important way for companies to expand their scale,and enrich their product lines and improve their industrial chains.M&A also helps companies to improve their performance.Synergy Effect refers to the effect that companies achieve better performance after M&A.Synergy Effect is the key factor to M&A.As the development of the capital market,The number of M&A cases has increased significantly.Among the large number of M&A cases,few companies have truly achieved synergies.Situations such as large losses and performance declines after M&A frequently occurred.In these M&A,many problems occurred,such as adopting unreasonable M&A plan,poor performance of acquisitions integration and unreasonable conglomerate merger.The emergence of these problems shows that many enterprises are lacking in effective guide to M&A.This article studies the case of Sunwave Communication' acquisition of Juwang Technology to study the M&A synergy effect.Sunwave Communication is one of the most famous Communication companies in China.The M&A of Sunwave Communication was finished in 2017.Through the M&A,Sunwave Communication achieved diversified operations.The M&A also helped Sunwave Communication in finding new profit growth points and improving operating performance.This article takes Sunwave Communication M&A case as the research object,using case analysis method and comparative research method to study the synergy effect of the case.Firstly,this thesis points out the background of China's capital market and the current situation of M&A,which highlights the significance of this research.It also sorts out the relevant researches both at home and abroad from the following three aspects: the definition of synergy effect,evaluation method and EVA;Secondly,it makes a theoretical review,and discusses the definition and motivation of merger and acquisition,the definition and evaluation method of synergy effect,and the definition and calculation of EVA momentum;Thirdly,it specifies the whole process of M&A of Sunwave Communication,analyzes the motivation of merger and acquisition,summarizes the three motivations of expanding business,sharing both parties' resources and investing in high growth enterprises;Then,it evaluates the synergy effect of merger and acquisition of Sunwave Communication from the financial index analysis method and EVA momentum analysis method respectively;Finally,it concludes that Sunwave Communication holds a several advantages such as accurately seizing the M&A opportunities and targets,setting up appropriate M&A plans and integrating resources of both sides.What's more,it indicates the disadvantages in cost control and product profitability.Through research,this article summarizes the matters that companies should focus on.First,companies should conduct detailed investigation on their target companies.The investigation should focus on the feasibility of the M&A activity,the performance and potential of their target companies.Second,the M&A plan should be formulated reasonably.Third,attention should be paid on business process integration and talent incentives,while business processes should be optimized.