Research On The M & A Performance Of Chinese Steel Corporations

This dissertation has integrated much of the results of relative researches on Merger & Acquisition performance measurement that had been based on theories of industrial economy, science of management and accounting. Taking the realistic situation of Chinese steel industry as main consideration, this dissertation has tried to build up a research framework of the M&A performance measurement of Chinese iron and Steel corporations through analysing the structure of M&A strategic goals of Chinese iron and steel corporations, observing and summarizing the essential M&A patterns and their features of changing and learning the M&A experiences of western developed countries and Mittal Group. Then this dissertation has built up an indicator system of M&A performance measurement led by the strategic M&A goals of Chinese steel corporations; taking the main steel corporations involved in M&A during the past 10 years as research samples, a factor analysis model of M&A performance has thus been developed in order to make an objective assessment of the M&A performance of sample corporations. Afterwards, this dissertation has carried out empirical study on the M&A performance of Chinese biggest four steel corporations from a micro view, and has induced the key factors of Chinese steel corporations' M&A performance. Finally, a system dynamic model of Chinese steel corporations' merger and acquisition has also been developed in order that suggestions of management could be advanced through feedback analysis.The full text is composed of eight chapters, the main structure and content of which is as follows:The first chapter is the introductory. This chapter includes the background and significance of the research topics, research state, the basic ideas and methods, the main content and structure, the major innovation points.Chapter II is the theoretical foundation of M&A performance measurement, which is composed of three parts, the first part has included the definition of merger, acquisition, recombination and takeover, theories of M&A motivations and effects. The second part has specified process of performance measurement development and relative theories. Based on the former two parts, concept of M&A performance has been advanced including its meaning and extension, as well as the main research methods in the third part.Chapter III has mainly analysed the characteristics, industrial chain of steel industry, and then reviewed the history of Chinese steel industry, following which is a detailed analysis on the industrial system, scale, organization and degree of concentration of Chinese steel industry. Then the content of M&A strategic goals has been treated through research views of three different theories, as well as the logic relations of the strategic goals.Chapter IV has induced three essential M&A patterns of international steel corporations as well as their motivations based on observation of changes of industrial structure in global steel industry, and then summed the M&A experiences of America, Europe, Japan and Mittal Group. Finally it has revealed the bottle-neck of processing M&A in China.Chapter V firstly discriminated the subject, object and objectives of steel corporations' M&A performance measurement, based on which an original indicator system of M&A performance measurement has been set up. Taking the main steel corporations involved in M&A during the past 10 years as research samples, a factor analysis model of M&A performance has thus been developed in order to make an objective assessment of the M&A performance of sample corporations. Seven weak correlation indicators were picked out after principal component analysis, and then the rest thirteen indicators including NPTS, ROE, ratio of profit to cost, etc were processed through factor analysis and finally 5 public factors were extracted. The M&A performance of sample companies has been measured and listed by scores of performance & public factors. In the end, deficiency of this model was discussed.Chapter VI, this chapter has carried out an empirical study on M&A performance of Chinese biggest four steel corporations (including Bao Steel, WISCO, Anben and Hebei steel) from a micro view, based on their M&A cases, factors extracted in Chapter V and five additional financial indicators. M&A performances of the four corporations were compared in two ways and finally the key factors of Chinese steel corporations' M&A performance were induced before their motivations were analysed. Management suggestions have been provided according to the key factors.Chapter VII firstly introduces the methodology of flow rate in-tree modelling and related digit matrix feedback ring computing of system dynamics. Then following the basic steps of flow rate in-tree modelling, the flow rate in-tree model of steel corporations' M&A is set up. After computing all the feedback rings, eight of the 10-order and 11-order feedback rings are chosen because of their effectiveness of reflecting the relationship between flow rates, and then analysed to obtain management suggestions.Chapter VIII is the conclusion of this study and follow-up research prospects. Based on the analysis of previous chapters, this chapter gives the main summarized conclusions of papers, the shortage of the study, and the indicated direction of the follow-up study.This dissertatioin uses the main line around the M&A performance of steel corporations; it has been fully absorbed the research results in the analysis process, and on this basis, by induction, carding, pithiness and improvement, the innovation points of this paper are as follows:Firstly, an empirical study upon the key factors of the M&A performance of Chinese steel corporations has been carried out based on analysis of the strategic goals and essential M&A patterns of Chinese steel corporations.Secondly, an M&A performance measurement indicator system has been built up based on the realistic situation of Chinese iron&steel industry, and the M&A performances of four biggest steel corporations has been put into a quantitative comparative research.Finally, this study has introduced methodology of system dynamics into the field of M&A of steel industry, and a system dynamic model of Chinese steel corporations' Merger&Acquisition has been developed. Management suggestions have been provided based upon results of feedback analysis and comparative research.