Analysis Of Financial Synergy Effect Of COFCO Real Estate Merger And Acquisition Of Joy City Based On AHP

In the context of the rapid growth of housing prices,the number of enterprises in the real estate industry is increasing,and the business competition is fierce.In order to achieve scale expansion or obtain more cash flow and improve their financial situation,many real estate enterprises inevitably choose the effective way of M&A and acquisition.However,Chinese enterprises have a short history of M&A and reorganization,and are in the exploration period of transformation and upgrading.Therefore,it is of great importance to adapt to local conditions to find a modern M&A and acquisition theory suitable for China’s economic development form and in line with China’s national conditions.This paper selects the case of COFCO Real Estate’s horizontal M&A of Joy City Real Estate,a subsidiary of the same parent company.After introducing the theories related to M&A and acquisition and financial synergies,it expounds the process of M&A and acquisition according to the time line.Based on analytic hierarchy process(AHP),the financial synergies of M&A companies are studied.Finally,the corresponding financial indicators are scored according to the four abilities of debt paying,operation,profit and growth of the M&A enterprise,and the financial synergies generated by the M&A are analyzed.Through the M&A and acquisition of Joy City,COFCO Real Estate saw a substantial increase in its operating capacity score and a certain improvement in its growth capacity score.However,due to the high financial leverage of the real estate itself and the economic downturn of the whole real estate industry impacted by the external environment,the profitability and solvency did not achieve the expected effect.In summary,this M&A successfully accomplished the M&A target,and summed up the advanced experience in the M&A process,which laid a solid foundation for the subsequent related M&A and acquisitions of other state-owned investment companies.