Research On The Motivation And Performance Impact Of LAL’s Continuous M&A From The Perspective Of Supply Chain Integration

At present,the polymer material chemical additive industry of China is in a boom period with huge market demand.Besides,Chinese government has formulated a lot of policies to support the development of polymer material chemical additive industry.But at the same time,polymer material chemical additive industry has been confronted with severe challenges due to the COVID-19 and market rivalry.In this situation,supply chain integration has become a critical tool for businesses to take advantage of chances,manage risks,and generate value.Many large enterprises integrate the supply chain through continuous mergers and acquisitions,reducing transaction costs and achieving synergy.LAL is a leading enterprise in the field of chemical additives for polymer materials.In recent years,it has achieved rapid growth through mergers and acquisitions.Based on the case of continuous M&A of LAL,this paper systematically analyzes and evaluates the motivation and performance of continuous M&A of LAL from the perspective of supply chain integration.This paper takes four consecutive mergers and acquisitions of LAL from 2017 to the third quarter of 2022 as the research sample,and takes the financial and non-financial data of LAL from 2017 to the third quarter of 2022 as the research support,uses the event study method to evaluate the short-term financial performance of LAL’s continuous M&A,evaluates the non-financial performance of LAL from the perspective of supply chain integration,and finally uses the financial index method to evaluate the long-term financial performance of LAL’s continuous M&A.The study concluded that,on the whole,LAL has achieved good financial performance through continuous M&A.Although the event study method shows that its continuous M&A have not achieved good market response on the whole,its development capacity has increased significantly in recent years,its long-term solvency has remained at the industry average,and its profitability and operating capacity declined after 2019 due to the COVID-19,But in 2021,after full integration,its profitability and operating capacity rose sharply.Based on the perspective of supply chain integration,this paper divides the four consecutive M&A activities of LAL into three stages:product line expansion type M&A stage,industry chain extension type M&A stage and new business expansion type M&A stage.In the stage of product line expansion type M&A,LAL conducted two M&A in total.For the first time,LAL acquired KR,expanded production capacity,improved product layout,and strengthened supply chain advantages.In the second merger and acquisition,LAL acquired KY,integrated supply chain resources,researched and developed new products,and achieved full coverage of the product line.At this stage,LAL broadened its product line,realized its product supporting advantages,expanded the scale of its main business,realized economies of scale,and realized a substantial increase in revenue and profits.The second stage is the the industry chain extension type M&A stage.In this stage,LAL acquired YNK,formed a certain degree of control over the upstream raw materials,absorbed the production capacity,enhanced the price stability and quality reliability of raw materials,and reduced transaction costs.At the new business expansion type M&A stage,LAL acquired KT,entered the lubricant additives industry,opened up new businesses,dispersed business risks,created a second growth curve and opened up a second growth point.On the one hand,the research in this paper can enrich the relevant theories of enterprises’ continuous M&A from the perspective of supply chain integration,and on the other hand,it can provide reference for enterprises in the same industry that are preparing for continuous M&A.