Study On The Application And Effect Of Financing Methods Of Overseas Merger And Acquisition Of Wingtech

With the continuous development of China’s economy,Chinese enterprises have begun to participate in the competition in the overseas market and enhance their strength through the acquisition of high-quality overseas enterprises.But overseas deals are often too expensive for companies to finance with their own capital.Many enterprises because of the limitation of financing problems lead to measures to acquire opportunities.Therefore,in the process of enterprise merger and acquisition,it is particularly important to quickly solve the financing demand and control the financing risk.However,there are few cases of overseas M&A financing methods in the communication equipment manufacturing industry.Therefore,this paper takes Wingtech’s M&A of Anshi as a typical research object to discuss the application of financing methods.This paper uses the case study method to study the overseas acquisition case of Wingtech.First of all,combined with the M&A case in this paper,the transaction structure,payment arrangement and capital requirements of each transaction are sorted out,and then the application and selection reasons of financing methods of each transaction are analyzed.Secondly,the Z-value is used to test the financial risk,analyze the loan repayment risk and exchange rate risk existing in debt financing,and analyze the risk of equity dilution existing in equity financing.By using the event study method and the horizontal and vertical comparison of the financial data of Wingtech from 2016 to 2020,this paper analyzes the impact of the application of financing methods on performance.Finally,combined with the analysis of the first two parts,the qualitative evaluation of financing methods.The conclusion of this paper is as follows: Wentai Technology has completed the M&A through multiple equity acquisitions and various financing methods.The main debt financing methods include merger and acquisition loans obtained by subsidiaries and Sun Company,loans with equity transfer conditions of Sun Company and syndicated loans obtained by the acquired party.The main equity financing methods include private placement to raise supporting funds and Sun Company to introduce investors to increase capital.Through the analysis of market performance,it is found that the capital market has a positive reaction to the merger of Wentai Technology.Through the analysis of financial performance,it is found that the debt paying ability,profitability and development ability of the enterprise after merger and acquisition have been improved,while the operating ability has been reduced.Financing activities will affect the capital structure,and then affect the financial indicators of enterprises.By adjusting the financing methods of enterprises,Wentai Technology has improved the financial performance of enterprises.The main contribution of this paper is as follows: by combining theories with cases,it enriches the case studies on the application of various financing methods by private enterprises in the communications equipment manufacturing industry,which has a strong practical significance and provides reference for the selection of financing methods for overseas M&A of Chinese enterprises.