Analysis Of The Motivation And Economic Consequences Of Enterprise Equity Investment

In recent years,socialist market economy and modern enterprise system having been established,corporate mergers and acquisitions have shown an explosive growth.While companies seek maximum capital appreciation,they also show a trend of more rational allocation of resources.In addition,China vigorously develops low-carbon economy now,so the green industry will have unparalleled opportunities.Therefore,many companies have begun to seek business development,or companies that already have related businesses have begun to further take environmental protection energy as the key strategic direction for the next step.Therefore,many companies focus on the field of environmental protection energy,and seek the development of business through mergers and acquisitions and other strategies.Zhuhai Port is mainly engaged in four major businesses including port and shipping logistics,energy and environmental protection,port city construction,and logistics and trade.And the energy business segment mainly includes electric power,pipeline gas and emerging environmental protection business,which is one of the company’s main profit sources.The main business of Tianlun Gas includes urban and transportation gas,LNG plant projects,long-distance pipelines,etc.In June 2021,Zhuhai Port plans to acquire a 12% stake in Tian Lun Gas,aiming to further expand the scale and development space of the company’s main new energy business,and enhance its sustainable development and profitability.This paper selects the case of Zhuhai Port’s cross-regional merger and acquisition of Tianlun Gas,analyzes the motivation and performance of the company’s equity investment target selection,and tries to explore the strategic layout of space economy in Zhuhai Port’s acquisition of Henan Tianlun Gas,so as to further learn the motivation behind the target behavior of merging across regions.This paper firstly sorts out and summarizes the literature and theories of M&A motivation and spatial economic analysis,systematically introduces domestic and foreign scholars’ research on M&A behavior motivation and spatial economic analysis,and outlines the methods of M&A performance evaluation.Then,focusing on the case of Zhuhai Port’s cross-regional investment in Tianlun Gas,the advantages of the main investor and the investee in terms of location,income and cost were introduced respectively,and the motives and various considerations when analyzing the company’s selection of M&A targets were considered and listed.Specifically,it is divided into three aspects: spatial economy(specific analysis based on central place theory,spatial interaction,etc.),corporate strategy(resource allocation,industry selection,etc.),and financial(cost-effectiveness,etc.)motives;finally,event research method and Du Pont analysis system are used respectively.,from the perspectives of market response and financial indicators,evaluates and analyzes the strategic planning and economic consequences of this cross-regional acquisition target selection,aiming to draw a conclusion that this equity investment has indeed produced positive effects on both companies.Economic benefits,and also hope to provide some experience for subsequent future business mergers and investment behaviors.