Baosteel M&A Performance Evaluation And Motivation Research

Merger and acquisition is the most efficient solution and a short cut for Chinese steel enterprises to expansion rapidly in order to dominate the market. Even when the subprime crisis sweeping the global finance and the whole steel industry generally at a profit even or small losses status, Chinese large-scale steel enterprises are keeping on pushing their merger and acquisition operations.Baosteel Group Corporation (herein after referred to as Baosteel) is the vanguard of China’s steel enterprises in long terms. In the past few years, Baosteel has acquired BAYI Steel, Guangdong Steel, Shao Steel, Ningbo Steel and formed a strategy alliance with Baotou Iron and Steel. In this article, we will evaluate the performance of the two typical companies:BAYI steel&Shao Steel by financial analysis and DEA envelopment analysis before and after acquired by Baosteel. Through the results obtained by evaluating we will try to find the real motivation and M&A target selection of Baosteel. Finally, based on the result of the evaluation, we will try to re-definition the model of M&A by the traditional M&M theory.