Research On Synergy Effect Of Jifeng’s Cross-border Merger And Acquisition Of Grammer

Along with the continuous development of China’s science and technology,culture and economy and the strong support of national policies,the automotive industry has been developing and growing rapidly in recent years,and auto parts,as an important basis for its development,has also maintained a rapid development.However,with some of the larger scale of operation and stronger technical strength of foreign auto parts companies into the Chinese market,a large number of local enterprises were suppressed,causing a huge threat to China’s auto parts industry.For local enterprises in China,how to get out of this situation to achieve enterprise development has become the focus of their thinking.Due to the high technical barriers and long R&D cycles,M&A has become the main way for Chinese component companies to seek rapid development,especially by using cross-border M&A to obtain advanced technology and market resources from foreign component manufacturers.However,whether the synergistic effect of M&A can be effectively achieved is the key to the success of M&A.Therefore,it is essential to study the synergistic effect of cross-border M&A of Chinese auto parts enterprises.The case of Jifeng’s cross-border M&A of Grammer is a "snake swallowing elephant" type of M&A,and the M&A process adopts the "PE+listed company" model,which is somewhat special and typical.This case is unique and typical,and the synergistic effect of its cross-border M&A and its specific evaluation will provide some reference and reference for other enterprises’ M&A behaviour in China.Based on the literature on the motivation of cross-border M&A and synergy effects,this paper applies the theory of economies of scale and synergy effects to analyse the process of Jifeng’s M&A of Grammer through the establishment of an M&A fund and the motivation of its cross-border M&A.Secondly,through certain methods,the operational synergy effects,management synergy effects and financial synergy effects of Jifeng’s M&A are identified.On this basis,the synergy effects of Jifeng’s M&A were analysed in a unidimensional and comprehensive manner by applying the indicator analysis and entropy method;finally,conclusions and insights were drawn.The study found that: Jifeng’s M&A has successfully achieved the strategic transformation into a multinational components company,and has achieved certain synergy effects overall,but there is still room for improvement,and the synergy effects have not reached the desired expectation;in terms of operational synergy,Jifeng’s growth ability has been improved after the M&A,and its market share has been expanded,but its profitability has been affected by Grammer and has shown a declining trend,so the operational synergy effect is not satisfactory.In terms of management synergies,the level of asset management and cost control of Jifeng’s has been improved to a certain extent after the acquisition,and the level of human resources has also been improved,resulting in significant management synergies overall.The overall financial synergy is not reflected positively.In terms of financial synergies,after the Jifeng’s acquisition,the high gearing ratio has exacerbated debt risk,tax savings have not been realised and the cash flow situation is not optimistic,so the overall financial synergy has not been reflected positively.