Research On The Motivation And Effect Of F Group’s Merger And Acquisition Of L Company

In recent years,with the increasingly prominent characteristics of the "new normal" of China’s economic growth,enterprises in traditional industries are faced with such challenges as market saturation,supply exceeding demand,profit space compression,and intensifying competition.Some enterprises choose mergers and acquisitions to transform the industry in order to find new profit growth points and achieve sustainable operation.Based on this background,this paper chooses F Group as the research object,and chooses the motivation and effect analysis of enterprise M&A to carry out research on this topic.Before the merger and acquisition,F Group belonged to the traditional manufacturing industry,and acquired an environment-friendly company from across industries.It successfully transformed itself to the direction of hazardous waste disposal and resource utilization.The case is typical to a certain extent.The research methods used in this paper mainly include literature research,event research,financial index evaluation,principal component analysis.This paper firstly combs and summarizes the research status at home and abroad from three aspects of M&A motivation,M&A effect and manufacturing M&A,and defines related concepts.At the same time,it introduces the theoretical basis and methods of the research,providing basic data and theoretical basis for the research of this paper.Secondly,this paper introduces the enterprises of both parties and their respective industries,summarizes and expounds the whole M&A process and payment method,and analyzes several major motivations for F Group’s M&A: dealing with operational risks;The need for strategic transformation;Obtain technical support and improve management efficiency.In this paper,the event study method is used to analyze the short-term performance changes after the merger and acquisition of Company L by Group F.After the first announcement of the merger and acquisition,the stock price changes of the company have a negative announcement effect.Considering that the payment method of the merger and acquisition is mainly the issue of additional shares,it is speculated that the small and medium investors react negatively to the merger and acquisition announcement or are concerned about the dilution of shares.Secondly,this paper uses sub-index analysis to analyze the long-term performance changes after M&A.The results show that the operating capacity and growth capacity of Group F have been enhanced to a certain extent after the merger,but the profit earning capacity of operating income and the long-term solvency of Group F have declined or been affected by the merger and integration.At the same time,this paper selects 11 financial indicators and uses the principal component analysis method to analyze the comprehensive change of F Group’s long-term financial performance after the merger,and finds that the comprehensive financial performance of F Group shows a positive change overall after the merger.Finally,this paper studies the change of non-financial performance of enterprises.After the merger and acquisition,the technological R&D and innovation ability of enterprises has been improved,and the motivation of transformation and upgrading has basically achieved the effect.Based on the above studies,this paper,based on the performance evaluation results of Group F’s merger and acquisition of Company L,proposes enlightenments and suggestions for corporate merger and acquisition activities from four aspects: target object selection,payment method design,performance commitment setting,integration risk avoidance,and summarizes the conclusions.This paper hopes to provide some reference significance for Chinese traditional manufacturing industry cross-industry merger and acquisition case.