Research On The Motivation And Effect Of ENN Natural Gas Corporation M&A Of ENN Energy Holdings Limited Under Common Control

With the continuous development of society and economy,enterprises are also constantly seeking better development.Since corporate mergers and acquisitions are considered to be a major way of integrating resources and improving competitiveness,more and more enterprises use mergers and acquisitions to seek higher profits and market positions.As a clean energy with low emission and low pollution,natural gas becomes more and more important in the energy field.In particular,along with the innovation of the oil and gas system in our country and the proposal of the "Fourteenth Five-Year Plan" for natural gas development,the prospects of the natural gas industry are improving.This is not an opportunity and a challenge for natural gas companies.How to achieve coordinated development through mergers and acquisitions has also become a problem that natural gas companies need to consider.Therefore,under the current situation,it is very necessary to study the motivation and effect of mergers and acquisitions in the natural gas industry.This article studies the case of ENN Natural Gas Corporation(“ENN”)merging ENN Energy Holdings Limited(“ENN Energy”)under common control.First of all,the first chapter talks about the backgrounds as well as the meanings of this paper.And the relevant literature on M&A motivation and effect evaluation is sorted out.Secondly,the correlating definitions such as M&A,common control and the theories used in this paper are involved.Furthermore,the current situation of the natural gas industry is introduced through the PEST model,and the two parties,the group where they are located,and the M&A process are summarized.Based on the above research,next part then analyzes the motivations of M&A,and summarizes the characteristics of M&A.Then,the effect of M&A of the main merging party and the merged party is studied by using the event research method,the financial index analysis method and the comprehensive index analysis method respectively.Finally,conclusions and enlightenment are drawn.According to the analysis before,there are several conclusions: The M&A is generally successful,and the motivation for M&A is basically realized.First of all,this M&A conforms to the national policies and industry development trends.Secondly,through the calculation of the event study method,the capital market has a positive attitude towards this event.Furthermore,through the research on integration and synergy,this paper believes that after the merger,ENN not only integrates the upstream and downstream resources of the natural gas industry chain,but also integrates human resources in order to adapt to the new development strategy after the merger.Growth capacity and operating capacity have both increased,and debt solvency has also tended to improve,which has played a synergistic effect on the whole.In addition,by studying economic value added,it can be seen that this event has brought value appreciation to the main merged party ENN and created more shareholder wealth.Finally,after a brief analysis of the stock price trend and profitability of the acquired party,ENN Energy,it is believed that it is precisely because the performance of both parties has been improved after this event that this M&A has played a role and enhanced the overall competitiveness of ENN Group.