Research On The Performance Of Shandong Iron And Steel’s Acquisition Of Laiwu Iron And Steel

The steel industry is one of the traditional industries in China and the first industry in China.Since the reform and opening up,China has vigorously developed its economy,which has led to a rapid increase in the demand for steel in the market.The steel industry has thus become a high-profit industry at that time.A large amount of capital has poured into the steel industry,and various steel plants of different sizes have been established.In recent years,affected by the global financial crisis,the steel industry is also facing bottlenecks in development.There have been obvious overcapacity,demand has continued to decline,and costs have risen,leading to falling profits.Faced with these difficulties and challenges,steel companies have adopted various channels to find a way out,and many of them have chosen to adopt mergers and acquisitions to enhance corporate efficiency and enhance competitiveness.This paper selects the case of Jinan Iron and Steel’s acquisition of Laiwu Steel as a case.Firstly,it expounds the research background,research significance,research methods and basic viewpoints,and then reviews the literature and related theories on M&A motivation,M&A market performance and financial performance.Then it discusses the background and existing problems of China’s steel industry mergers and acquisitions.Taking Jinan Iron and Steel’s acquisition of Laiwu Iron and Steel as the research object again,the motivation,background and M&A process and plan of this merger were introduced in detail,and the event research method was used to calculate the cumulative yield(CAR value)and the purchase held excess income.Rate(BHAR value)and calculation of the company’s financial indicators to analyze the effect of the merger,and finally draw conclusions.After the merger,the overall performance of Shandong Iron and Steel showed a downward trend.The Jinan Iron and Steel Group’s merger and acquisition of LaiwuSteel did not increase its corporate value,but reduced the market value.It can be seen that the integration after reorganization is the most important thing.Therefore,it is necessary to strengthen integration in strategy,product value chain,organizational structure,financial management system,etc.,increase the research and development efforts of enterprises,control costs,improve product quality,and thus ensure Good development of the company.