Study On The Motivation And Performance Evaluation Of Wanda Film’s Acquisition Of Hoyts Cinema

The China Culture Development Report states that in 2020,China will pay considerable attention to cultural industries,cultural innovation will be more dynamic,China’s cultural value added will gradually increase as a percentage of GDP,and its contribution to the national economy will steadily increase.This development phase will help investment companies in other industries in China to make the transition to culture and in turn promote the development of China’s cultural industry together with the economy.Due to the great opportunity of China’s culture industry,more and more compaines try to find some solutions such as merger and acquisition to make sure healthy development of chinese cultural industry and join the global marketing economy rapidly.Nowadays,the governments pay more attion to the cultural industries’ development,then the goverments announced effictive polices and rules to help the cultural company to be more stronger against the marketing at the same time.The goverments also wanted to guide the enterprises to focus the global markets.Meanwhile,China’s film industry has undergone decades of precipitation,with rapid changes,and the cinema market has spread to all corners of China’s large,medium and small cities.Nowadays,the increasing amount of cinemas and also the violent competition of the movie industry.As the consequence,it is necessary for the relevant company to try mergers and acquisitions.Wanda Film Cinemas Co.,Ltd(hereinafter referred to as "Wanda Film")is one of the holding companies of Wanda Group.In Australia,the year of 2015,Wanda Film made an acquisition of Hoyts Cinemas,that is the first time that Wanda Film made a separate acquisition overseas.Therefore,this paper takes Wanda movie M&A as an example,explores its M&A motivation in depth,and analyzes and evaluates the M&A performance.This essay will introduces the background and significance of this thesis at first,and composes the literature and theoretical knowledge related to M&A motives and M&A performance.In corporate M&A,corporate M&A motives include obtaining synergy effect,achieving scale effect,and realizing diversification strategy transformation;corporate M&A performance evaluation includes financial index method and event study method.Secondly,we briefly analyze the basic situation of the film industry in China and Australia,and then briefly introduce the main financial situation of two enterprises,Wanda Film and Hoyts Cinema,before their M&A,and briefly explain their M&A plan,characteristics and main financial situation after their M&A.The SWOT method is also used to summarize the M&A intentions of both parties and then analyze their M&A motives;Then,the financial performance is analyzed using the financial indicator method,followed by the event study method to analyze the market performance.Rely on the results of the above two methods,we explore the impact of the M&A on the company,and whether the M&A can achieve its objectives and expected effects.Finally,this essay will give the conclusion of the M&A activities.In order to give the China’s cultural industry some advice for the future cross-border M&A activities,meanwhile,culture enterprises could have more competitive and also help the China’s cultural industry to achieve the bright future.Based on the above analysis,the paper finally draws the corresponding conclusions,which are as follows.(1)Wanda Film’s M&A of Hoyts Cinemas in Australia is motivated by the integration of resources through synergy and scale effect to realize the strategic transformation of corporate diversification in an increasingly competitive market environment.(2)In terms of M&A performance,Wanda Film’s operations and profitability have improved,not only in terms of asset growth and efficient achievement of expected targets,but also in terms of overall corporate conditions and good market returns.(3)The insight of this M&A is that enterprises should adhere to the correct development strategy,clarify the motives and targets of M&A before M&A,and pay attention to the risks in the process of M&A.