Research On The Merger And Acquisition Strategy And Its Effect Of Shanghai Electric

In order to ensure the realization of the "double carbon" goal,China has made a lot of plans in terms of economic transformation and industrial upgrading.Enterprises that rely on traditional energy are facing a severe test.If they want to achieve sustainable development,power enterprises must pay attention to new energy markets such as wind power and photovoltaic,accelerate the adjustment of their own industrial structure and strategic change,so as to enhance their competitiveness in the market.In recent years,the wave of mergers and acquisitions,represented by state-owned enterprises,has prompted traditional power companies,mainly thermal power companies,to join in.At present,the power industry of our country is in a special period of energy transformation,how to use the merger and acquisition of power enterprises to seize the opportunity to realize strategic transformation is worth thinking.This paper first describes the literature related to M&A and strategy,and then,based on the synergistic effect theory,principal-agent theory and transaction cost theory,selects the case of Shanghai Electric’s M&A of Tianwo Technology,analyzes the industry background of both parties,and points out the strategic choice of Shanghai Electric by SWOT analysis method.Then,it analyzes the motivation of M&A from three aspects: industrial upgrading,synergistic effect and policy orientation,summarizes the transaction process combining private placement and share transfer,and analyzes the integration process after M&A.Then it analyzes the effect of the merger strategy of Shanghai Electric from four aspects: capital market reaction,synergistic effect,Dupont analysis and economic added value.The research results show that the merger and acquisition of Shanghai Electric,from the perspective of strategic implementation:(1)on the overall strategic level,Shanghai Electric has achieved the strategic goal of diversification.On the basis of maintaining the traditional energy business,it has improved the development layout of the new energy industry and added new businesses for the enterprise.(2)At the level of competitive strategy,differentiation strategy has formed the first-mover advantage in the field of photothermal power generation.(3)At the functional strategy level,the use of production and operation strategy,financial strategy,research and development strategy and human resources strategy to promote M & A integration,has a positive effect.From the results of merger effect: through the event study method,it is found that the capital market has a low degree of recognition for the merger of Shanghai Electric and Tianwo Technology.Through the analysis of synergies,it is found that:(1)In the aspect of operating synergies,the operating revenue of integrated service sector after the merger of Shanghai Electric and Tianwo Technology increased significantly,but the gross profit margin decreased.(2)In terms of management coordination,after the completion of the merger and acquisition of Shanghai Electric,the rate of management expense decreased significantly and remained stable,and the total asset turnover increased.The turnover rate of receivables of the acquired party increased significantly compared with that before the acquisition,indicating that Shanghai Electric played a positive role in the management of the acquired party after the completion of the acquisition.(3)In terms of financial coordination,Shanghai Electric paid a large amount of acquisition price in cash during the merger and acquisition,and provided loans and guarantees to Tianwu Technology after the completion of the merger,and the solvency was basically not affected.Through the analysis of Du Pont model,it is found that the return on equity of Shanghai Electric increased after the merger and acquisition of Tianwo Technology.Through the analysis of economic added value,it is found that in the year of the merger of Tianwo Technology,economic added value changed from negative to positive.On the whole,the two mergers and acquisitions have achieved strategic goals and value creation for Shanghai Electric.According to the research results,the following suggestions are put forward: in the planning stage of M&A,it is necessary to consider the matching degree of the two sides from the strategic level;In the process of M&A transaction,enterprises should also pay attention to the choice of payment method;Strategic integration after merger and acquisition to achieve synergies.