Post-Merger Integration Performance Based On Synergy

ABSTRACT:With the development of the globalization of economy, M&A will be more and more active. Beyond all doubt, synergy effect becomes the key to the success of enterprise's M&A, Most of the value of a merger is created by the integration process, the source of M&A value creation that arises from the enterprise competitive advantage generated by the Post-merger integration, the most common theoretical principles of M&A integration activities is to seek synergy. Therefore, this paper focuses on the operational mechanism of synergies in the functional activities of the value chain (purchase, R&D, production, marketing services and other supporting activities), Selecting 15 index to construct indicator system of integrated performance, then calculating comprehensive score of the Post-merger integration performance by using principal component analysis, so evaluating the synergy effect of the Post-merger integration. Taking Weichai M&A Xiang Torch as an example, Through the comparative analysis of performance between 2004 and 2010, the following conclusions can be drawn. Firstly, Weichai has implemented effective integration on strategy, organization, marketing, human and cultural aspects. Secondly, Weichai has obtained synergy effect in every link in the value chain. Thirdly, Weichai has complete industry chain in heavy truck industry, therefore, market position and the competitiveness of enterprises have been enhanced.