Financial Analysis Of Synergy Effect In Merger & Acquisition

Nowadays, enterprises in the developed countries more and more depend on the means of M&A to expand their business, to realize the collection of the capital and production, to aim at their increase. With the development of market economy and the globalization of economy, M&A in our country will be more and more active. Beyond all doubt, synergy effect becomes the key to the success of enterprise's M&A.How to get to know synergy effect? How to identify synergy effect? How to seek for synergy effect? How to realize synergy effect? The solution of all these problems is of great theoretical and practical significance to enterprise's M&A in our country. This article analyzes the Synergy Effect in Merger & Acquisition mainly from the financial angle, to introduce a series of financial indicators in to analysis of synergy of M&A.Five main parts compose this paper. The first part is about research background and significance; Research Framework; Research Methods and summary of synergy effect in M&A.The second part is about the theory of M&A and the theory of Synergy Effect in Merger & Acquisition; this part also limited the M&A type which this article studies for is Strategic M&A and Horizontal Merger, and the synergy effect in M&A which this article studies for are management synergy effect, operating synergy effect and finance synergy effect. This part of content is paving the way for the next two parts that are established an analysis framework and chose two cases. From Index analysis and Qualitative Analysis two levels, the aim of the third part is to established a new analysis framework about three synergy effect in M&A, which is management synergy effect, operating synergy effect and finance synergy effect; The forth part is Case analysis about SHANGHAI NO.1 DEPARTMENT STORE CO., LTD's M&A with SHANGHAI HUA LIAN CO., LTD and LENOVO's M&A with IBM PC Department, and pointed out which kind of synergy effect it got. According to the case analysis results, the last part pointed out which place reasonable or needs to revise in the analysis framework, gives a comprehensive evaluation method about synergy effect in M&A and also pointed out the deficiency. In this paper, the biggest innovation lies in the following three points:The first is this paper start from the micro-level, use the case study methods to research how to evaluate the synergy effect in individual enterprise's M&A.The case study can help us better understanding synergy effect. In case study, the individual enterprise have the same background, so that this method more practical than other methods.The second is using quantitative analysis and qualitative evaluation methods to build a analytical framework which is used to measure whether the synergy effect in individual enterprise's M&A is realized or not.The third is not a general assessment of whether the enterprise acquired the synergy effect, but divided into three different synergy effects, management synergy effect, operating synergy effect and finance synergy effect, to evaluate which part is realized or which is not. In this way, it will be enable the enterprise better understanding which part is succeed or which part is losing, so that take the corresponding measure to get the synergy effect.