Research On Synergistic Effect Of Western King Foods’ Acquisition Of Kerr Corporation

With the global economic integration,the market competition in the21 st century has become increasingly fierce.In order to improve their competitive strength,many food enterprises try to expand their economic scale and create economic benefits by means of M&A.Studying the shortterm synergistic effects and long-term synergistic effects of cross-border M&A of food companies,and making a comprehensive evaluation of the effect of resource integration and the improvement of capital utilization of both sides of the M&A,can intuitively judge whether the M&A companies have achieved the expected M&A purposes and lay the foundation for their future development planning.This paper takes the acquisition of Kerr Canada by Xi Wang Food as an example,and studies the motivation of Xi Wang Food’s M&A and the short-term and long-term synergistic effects after the M&A,which is of great significance to its development strategy of "China’s No.1 health food brand".The article also analyzes the factors influencing the decline of long-term synergy effect after M&A,and provides reference for other food companies to improve the synergy effect of cross-border M&A.First,the article uses the event study method to evaluate the shortterm synergistic effect of Xi Wang Food’s M&A.Through the study,it is found that Xi Wang Food’s excess cumulative return tends to increase during the window period,indicating that the M&A brings wealth value to shareholders and the short-term synergistic effect is realized.Secondly,the long-term synergy effect was evaluated using the financial index method,and it was found that its operational synergy effect was insignificant,financial synergy effect was insignificant and management synergy effect was significant;the long-term synergy effect was evaluated using the nonfinancial index method,and it was found that its technology synergy effect was insignificant and brand synergy effect was significant;the long-term synergy effect was comprehensively evaluated using the entropy value method,and it was found that its overall long-term synergy effect after the M&A The long-term synergistic effect was found to decrease after the merger.The article analyzes the internal and external factors that lead to the decline of long-term synergy effect of Xi Wang Food,including the internal factors of payment risk and insufficient investment in R&D,and the external factors of exchange rate risk and poor integration of cultural resources after the merger.Finally,the article proposes targeted suggestions for Xi Wang Food to improve its cross-border M&A synergy effect,i.e.,choosing payment methods reasonably,increasing R&D investment,avoiding foreign exchange risk reasonably,and paying attention to post-merger cultural resource integration,and suggests insights for other food companies to improve cross-border M&A synergy effect,i.e.,choosing diversified financing methods,paying attention to post-merger integration,and enhancing risk prevention and control awareness.