A Study On The Motivation And Performance Of Overseas Mergers And Acquisitions Of Nonferrous Metal Enterprises

Non-ferrous metals are essential basic materials for the development of national economy,national defense industry and science and technology,and their rarity and non-renewable nature also make them important strategic resources of all countries.With the proposal of China’s "going global" strategy and the "the Belt and Road Initiative",a large number of domestic enterprises have started overseas mergers and acquisitions,and the nonferrous industry is one of the earliest "going global" industries in China.Through overseas mergers and acquisitions,non-ferrous enterprises can realize the allocation of resources globally,and help to avoid trade barriers and accelerate the development of overseas markets.In recent years,under the impact and influence of the COVID-19,the scale of China’s overseas M&A investment has begun to decrease.However,under the influence of various factors such as the proposal of the "double carbon" goal and the complex and volatile external environment,the "going out" of the non-ferrous industry is indeed an urgent need.Zijin Mining,as the leading enterprise in China’s nonferrous metal industry,has carried out large-scale counter-cyclical overseas mergers and acquisitions in the industry since 2014,which has achieved leapfrog growth in enterprise performance.What are the specific reasons for Zijin Mining’s overseas M&A from 2014 to 2021?What are the mechanisms and specific performances that have an impact on enterprise performance? This paper has carried out multi-angle research and analysis on these two main issues.The main contents of the article are:Zijin Mining is one of the typical representatives of China’s resource-based enterprises actively implementing overseas M&A strategies.This article takes Zijin Mining as the research object and conducts a detailed study on the motives and performance of continuous overseas M&A conducted by enterprises from 2014 to2021.Based on the synergy effect theory,economies of scale theory,market power theory,and undervaluation theory,this paper conducts a comprehensive study from short-term and long-term perspectives to explore the value effect of continuous overseas mergers and acquisitions on Zijin Mining.After elaborating on the development and mergers and acquisitions of the non-ferrous industry in recent years,this article sorts out the continuous overseas mergers and acquisitions activities of Zijin Mining,and analyzes the motives for mergers and acquisitions from the macro environmental level,industry level,and enterprise level based on the company’s own development strategy.Then,it analyzes the mechanism of continuous overseas M&A performance,and uses the event study to explore the short-term value and market response of overseas M&A events.The long-term performance and value creation of enterprises are studied using methods such as basic financial and non-financial performance research,EVA analysis,and principal component analysis.Finally,based on the continuous overseas mergers and acquisitions activities of Zijin Mining,this article provides targeted suggestions for other enterprises in the industry to conduct overseas mergers and acquisitions.Through research and analysis,this article draws the following conclusions:Firstly,the driving forces for Zijin Mining’s continuous overseas mergers and acquisitions from 2014 to 2021 mainly include the huge demand for domestic non-ferrous resources,the lack of high-quality mineral resources in China,the pressure of relevant environmental policies in China,the relatively low overseas merger and acquisition prices in the industry in reverse cycles,and the orientation of enterprise development strategies Fully utilizing the technological and financial advantages of enterprises,and reasonably avoiding trade barriers to accelerate the development of overseas markets;Second,the results of the event study method show that both the single overseas M&A event and the overall overseas M&A event have caused positive market reactions,and the short-term performance of overseas M&A is good;Thirdly,a comprehensive analysis of long-term performance indicates that the continuous overseas mergers and acquisitions of Zijin Mining have significantly improved its profitability,enhanced its development potential,achieved rapid accumulation of shareholder wealth,and increased its value.The economic benefits and comprehensive performance of Zijin Mining are showing a rapid upward trend,and it is expected to usher in another period of performance explosion in the future.This article analyzes the continuous overseas mergers and acquisitions of Zijin Mining and proposes the following suggestions for other enterprises in the industry:1.Timely conduct overseas mergers and acquisitions;2.Carefully implement overseas mergers and acquisitions;3.Pay attention to the integration activities after overseas mergers and acquisitions.