Synergy Analysis On Mergers And Acquisitions

Recently, M&As flourishes in home and abroad, but the rate of failure is very high, most of which is caused by the lack of synergy or the limited synergy. Especially in China, the phenomenon of diversifying blindly, listing by buying shell, pursuing the hotness of industry or restructuring inveraciously is fairly common. This article surrounds the center of synergy, that is, value creation, and studies its theory, mechanism, evaluation and distribution, so as to outline its whole frame and provide reference for the theoretical and practical circles.Firstly, this article expounds the theory of synergy and presents four main conditions in order to avoid "the synergy trap". Then, it discusses the four methods of synergy evaluation, pointing out the importance of cash flow method and event-based method in ex-merger and post-merger. Further, using the event-based method, the author examines the synergy of China's M&As empirically. It finds out that M&As in China didn't create any new value in short time. The article also studies the synergy distribution according to the resource and capacity contribution to synergy. Finally, based on the above study and the problems lying in China's M&As synergy practice, it puts forward several suggestions.