The Research On M&A Performance Of State-owned Enterprise Under Government-led

Merger and acquisition is not only an important way for enterprises to stand out in the competition,but also an important means for the government to adjust the macroeconomic structure.At present,China’s steel industry is facing a global economic downturn.At the same time,the industry has excess manufacturing capacity,fierce competition and increased environmental pressure.In recent years,based on the national strategy,the government has vigorously promoted the M&A of state-owned enterprises.At this time,Baosteel’s acquisition of WISCO incident arises at the historic moment.With the continuous development of M&A practice,the M&A performance evaluation system has been improved.Under China’s economic development model,China’s performance evaluation system has been established by referring to the relevant western evaluation system.According to the policy requirements of accelerating the "supply-side reform",the original system that only focuses on evaluating the efficiency of M&A from the financial perspective needs to be further improved.Two new requirements for the M&A performance evaluation system are proposed:(1)State-owned enterprises are the important support of China’s national economy and the absolute subject of China’s economic activities.When constructing the performance evaluation system of M&A,we should consider the policy intentions at the national level and select relevant indicators for analysis.(2)Low-carbon economy is becoming a new trend of international development.Besides economic benefit index,ecological benefit index should also be considered.Therefore,this paper chooses the acquisition of WISCO by Baosteel as the research object.Fully considering the role of the government,this paper studies the motivation and performance of M&A of state-owned enterprises.From the perspective of enterprise and national strategy,this paper establishes the performance evaluation framework of state-owned enterprise M&A led by the government.This paper makes a comprehensive use of event study method,financial index method and special performance evaluation method.The conclusion has theoretical and practical significance.From the research conclusion,the short-term performance of Baosteel’s M&A of WISCO is not significant.From the perspective of the market performance of mergers and acquisitions,the performance is positive but not stable,which is related to market fluctuations.In addition,the author believes that the merger of WISCO will give some inspiration to the new round of State-owned enterprises reform in the future.The main points are as follows.(1)The initiative of spontaneous merger and reorganization of large State-owned enterprises in the market is insufficient,and the government-led merger and acquisition will greatly improve the efficiency.(2)Mergers and acquisitions will be the most important means to make state-owned enterprises bigger and stronger in the future,especially the most important means to enhance international competitiveness.The government should actively promote positive mergers.(3)Both sides of the enterprise should formulate reasonable reorganization plan after merger and acquisition.