The Impact Of Continuous Mergers And Acquisitions On Value Creation

With the rapid development of the social society,the competition in the domestic market is becoming increasingly fierce.Every industry and each industry have different development situations.Compared with the continuous development of the Internet and emerging industries in full swing,the development of today’s society is becoming more and more intelligent and scientific,but most of the traditional industries are still based on machines and manpower.In the present,the cost of domestic labor is not as low as before,so the development will be greatly limited.The income and profit of enterprises are not ideal,while the traditional textile manufacturing industry has been hit hard,and the development prospect is not ideal.At the same time,since 2018,it has continuously suffered from the adverse impact of Sino US trade friction,and since 2019,it has been affected by the global COVID-19.The development of enterprises and the import and export of goods have been greatly affected,leading to further reduction of the profit margin of the textile and clothing industry,and the development of enterprises is suffering from a downturn.In order to defend the risks brought by the market and seek new development,more and more traditional clothing industries have begun to upgrade and transform to break the difficulties and seek new profits.Therefore,mergers and acquisitions have always been an important way for enterprises to carry out strategic transformation,continuously expand business,expand market and create greater enterprise value.This research takes Lancy as an analysis case to explore the various impacts of its continuous mergers and acquisitions(M&A)on enterprise value creation through research over the years.Based on the theories of diversification,scale effect,synergy,and sustainable development,this research analyzes the following text.It combines case analysis,literature research,and comparative analysis to investigate the motivation for the continuous merger and acquisition of Lancy Shares,as well as the value creation analysis of the continuous M&A.Firstly,a brief introduction is given to the industry background of the company and the relevant situation of the company;Secondly,it elaborates the process,motivation,and value creation path of continuous M&A of enterprises in detail.Then,it analyzes the value creation of the continuous M&A of Lancy through several aspects,such as business performance,market influence,changes in enterprise value,market value,and sustainable development;Finally,based on the above analysis,this case is summarized and refined,and some inspirations are obtained,hoping it can provide some reference value for subsequent continuous M&A of companies.Through the above analysis,on the one hand,this thesis draws the following conclusions:Firstly,the continuous mergers and acquisitions of enterprises have improved the performance of enterprises,it is reflected in the improvement of the profitability,solvency,operating ability and growth ability of enterprises in different degrees,which has produced a certain synergy;secondly,the influence of enterprises has also been improved,the number of stores has increased,the scale of enterprises has expanded,and the marketing channels have been broadened.From the perspective of shareholders,the return on net assets and the return on investment capital of enterprises have been improved,which has increased the value of enterprises and the income of shareholders;Moreover,the M&A behavior of enterprises has brought good market reaction,attracted a lot of investment and stabilized the market value of enterprises;finally,the continuous M&A of enterprises is conducive to the sustainable development of enterprises,and promotes the continuous development of enterprises.Through the cooperation and linkage between various business sectors after the M&A,Lancy has been developed and innovated in medical and aesthetic technology,and has been steadily improved in fashion brand building.The enterprise has not only improved the core competitiveness,but also helped enterprises realize value creation from multiple levels.On the other hand,this thesis draws the following enlightenment through analysis: firstiy,the enterprise should make correct choices of target companies around the enterprise strategy when making strategic choices;secondly,the enterprise should choose reasonable and diversified payment methods to cope with certain risks;thirdly,the enterprise should formulate M&A strategies from the perspective of life cycle in order to better achieve the purpose of M&A;finally,the enterprise should effectively integrate after M&A to achieve the integrated development of new groups of enterprises.