M&A Strategy, Input Efficiency, Resource Integration And M&A Performance Of A-share Steel Companies

Iron and steel industry occupies a pivotal position in China’s socialist modernization,there are many related industries upstream and downstream, which has made tremendouscontributions to China’s labor employment, regional economic development and thedevelopment of downstream industries. It is also the pillar industry of China’s nationaleconomy, the whole industry chain accounts for about8.8%of China’s GDP, the developmentof the steel industry plays an important role of the overall development of our nationaleconomy, and thus the development of the steel industry has aroused widespread concern.Since the1990s, China’s steel industry has been developing rapidly along with the rapidgrowth of China’s macro economy. Crude steel production in1981was only35.6million tons,in2000has increased to130million tons, an average annual growth rate of7.0%, untill2012,crude steel production was up to720million tons, accounting for47%of total world steel.However, with the rapid growth of crude steel production, China’s steel demand downstreamgrows slowly, the problem of overcapacity has seriously restricted the development of China’ssteel industry. The steel market crises, the whole industry meets operational difficulties,companies’ market capitalization, even Shougang Group, Baosteel, Anshan Iron and Steel andother large state-owned enterprises have not been spared. Iron and steel industry haswitnessed a rain depression scene. To this end, China’s steel industry needs to find a correctpath of development, in order to get out of the haze of sustained losses as soon as possible.Based on the theory of mergers and acquisitions, this article tries to conduct research onthe domestic steel industry mergers and acquisitions from the perspective of "M&A chain"perspective. After clarifying and summarizing related concept and research results, this articlestarts from the current situation of China’s iron and steel industry, making a detailed analysisof the exsitig problems, and points out that M&Ais the best way of China’s steel industry outof the woods; it further analyses M&A input efficiency of domestic steel industry, putsforward the innovation evaluation index—" leverage ratio" and establishes a comprehensiveindex evaluation system to make empirical analysis of the selected22listed steel companiesby principal component analysis; later, the post-merger integration is analyzed, and theimportance of resource integration of the "M&A chain" is identified, then post-mergerintegration is analyzed from two aspects as the strategic resource integration and functionalmanagement resource integration; Finally, the factors affecting the performance is analyzedand some suggestions are proposed to enhance the performance of the steel enterprises.I hope this article can point out the direction of development for China’s iron andsteel industry in the future, provide some ideas and methods to help steel companies to tideover financial difficulties.