Performance Study Of Fyg’s Overseas M&A Of SAM

As China’s reform and opening-up gets deeper,China’s auto industry as a whole is currently undergoing a complex transformation period.In order to acquire advanced technologies,high-end customers and global markets as soon as possible,overseas mergers and acquisitions have developed into an important means for Chinese component manufacturers.Therefore,how enterprises can effectively make crossborder investments has become a hot issue worth studying nowadays.Fuyao Glass is a strong domestic enterprise with more than 30 years of experience in multinational trade,and the company is currently facing low growth in its auto glass business.The overseas acquisition of SAM is an important strategic plan made by Fuyao to break through the status quo,cope with the industrial transformation,and extend the upstream and downstream industrial chain to further expand the market by acquiring technology and customer resources,so it is important to study this acquisition and summarize the relevant experience.This paper takes resource demand theory,market power theory and synergy theory as the theoretical basis,as well as compares the literature related to M&A performance studies and reviews the literature accordingly.With the support of theory and literature,this paper selects the case of Fuyao Glass’ overseas M&A of German SAM,reviews the overview of the two parties and the M&A process,then analyzes and summarizes the motivation and integration effect of the M&A.At last,the market performance analysis of this merger is based on the event study method to determine whether it brings wealth effect to shareholders.The financial performance of Fuyao’s acquisition of SAM was analyzed based on the EVA method,factor analysis and the improved BSC evaluation system,with three dimensions of corporate value creation,comprehensive financial performance and M&A synergy effects.In addition,all of them are compared with related situations in the industry in the same period,so as to objectively and comprehensively analyze the performance related to this overseas M&A.The study shows that the market performance of Fuyao’s overseas acquisition showed a positive effect in the short term,but the actual market performance failed to bring significant wealth effect to shareholders as the window period was extended.In terms of financial performance,the value creation ability of Fuyao Glass weakened in the year of the acquisition,but the company has since recovered,while the overall financial performance of Fuyao also shows a similar trend.However,since the company acquired many advanced patents and technologies after the merger,its sustainable development capability has been significantly improved.Meanwhile,the overall synergy effect of this overseas merger is significant.Finally,based on the conclusions,we draw insights and hope to summarize some practical experiences for how domestic auto parts enterprises can participate in international competition and promote their sustainable development in the process of rapid international expansion.