Analysis Of The Characteristics And Economic Consequences Of Midea Group’s Share Exchange And Acquisition Of Little Swan Company

In recent years,the domestic economic pressure is increasing,although the home appliance industry has full market competition,but the homogenization trend has obviously made it more and more difficult to survive and develop,and some enterprises pursue more efficient business models in an effort to continue market expansion and improve competitiveness.M&A is considered a way for companies to quickly break new ground and open up new areas of productivity growth.As many enterprises choose mergers and acquisitions,Midea Group,as one of the leaders in the home appliances industry,is also eager to try and acquire Little Swan Company by way of stock exchange.The overall process and details of the M&A plan are worth studying and analyzing.For the purposes of this paper,we choose as our research object the case of Midea Group’s acquisition of the stock market of Little Swan Company as our focus,assess the features and rationality of its M&A plan,explore the potential for M&A to improve performance,and analyzes the reasons.First,we cull and summarize the research literature on relevant theories domestically and internationally,and the relevant theories such as merger and acquisition,mergers and acquisition performance,merger motivations,and the evaluation of merger performance are extracted;Secondly,this section describes the background of the home appliance industry and the background circumstances of the firms on either side of the industry,and the merger and acquisition drivers are analyzed.Then,the rationality of the timing,target,payment method and share exchange price and proportion in the merger plan is analyzed,and the merger results are obtained and the details of the subsequent integration plan are evaluated.Finally,through the establishment of the M&A system of performance appraisal,including: method of event research,method of analyzing financial indices,economic added value evaluation method,Midea Group’s annual report and other relevant public information to evaluate and analyze the economic consequences of M&A.The conclusion is that the acquisition significantly increases the short-term market performance of the United States group.Not only some financial indicators in the year of M&A have a positive reaction,even after M&A all the indicators are positive;Changes in economic value added show that the wealth created for shareholders by M&A continued to climb during the year.Therefore,the success of the merger has a positive effect on the enterprise and improves the performance of Midea Group;it avoids the cash outflow and reduces the operating pressure of the enterprise;the reasonable determination of the rights and interests of both shareholders;and the effective implementation of the integration scheme promotes the development of the enterprise.