Research On Financial Synergies In Horizontal Acquisitions Of ROBAM To KINGDI

With the level of urbanization and the increasing improvement in the income level of residents,the quality as well as the functions of kitchen appliances are increasingly concerned by the residents of China.2018 is a watershed year for the development of the kitchen industry,before the kitchen industry’s rapid growth and significant dividends,after this,the real estate industry development is cold,the kitchen industry due to its close relationship with the growth rate slowed down.At the same time,the integrated cooker is growing against the trend,becoming the only positive growth category in the scale of tens of billions.In addition,there are many traditional kitchen appliance companies,but the concentration of products is low.Therefore,the industry winter period,for small and medium sized enterprises is dangerous,for some large enterprises,is both dangerous and opportunity.Through M&A restructuring can broaden the market scale of enterprises,cut into the well developed emerging markets,and solidify their market position.Therefore,it is necessary to study the horizontal M&A in this period.By analyzing the financial synergy effect generated after the M&A,we can improve the theoretical basis of M&A in the kitchen appliance industry and provide some reference for the subsequent M&A activities in the kitchen appliance industry.In this paper,we take the case of the acquisition of KINGDI,a reliable integrated cooker technology,by the leading company in the traditional kitchen appliance industry,as the research object,by reviewing the relevant literature and theoretical knowledge,referring to the public annual reports and announcements of the companies and the relevant information on financial websites.This paper first introduces the M&A case,and then analyzes the financial synergy effect by analyzing the financing effect,financial activity effect,cost-benefit effect,cash flow effect and tax saving effect,then uses the Entropy Method as a comprehensive scoring method to score the financial synergy effect as a whole,summarizes and suggests the effect and shortcomings of the financial synergy effect,and finally draws relevant conclusions and insights.This paper concludes that the horizontal merger and acquisition of KINGDI by ROBAM has produced positive financial synergy effects in terms of improved corporate capital control ability,improved financial performance,steadily increasing revenue share of integrated cooker,expansion of scale effect of the enterprise and tax cost saving,etc.But there are also some shortcomings,such as the adoption of a defensive strategy model and low market share in the integrated cooker field.Insufficient investment in R&D and weak brand innovation ability after the merger and acquisition,etc.Based on the above analysis,some inspirations for other kitchen appliance companies are drawn.For example,the M&A companies should choose the companies that are in line with their development strategies;after the M&A,they should focus on the improvement of core competitiveness and the integration of resources.