The Research Of Financial Effect Of Business Combination Under Common Control

Throughout merger cases at home and abroad, many companies through the waves, layout their own "position" in the storms in, but there are some companies can not withstandwind and waves, disappeared from public view. Five merger wave achievement of a largenumber of well-known enterprises, but also makes some were drowned. Visible, M&A is adouble-edged sword. However, strong economic motive behind the merger and the drivingforce, attracting the attention of part of the business group, is thought through mergers andacquisitions among enterprises put their business bigger and stronger. The main componentsof the chemical industry is also China’s second, since the reform and opening up, China’schemical industry has made remarkable achievements, but also inseparable from thedevelopment of the chemical industry mergers and acquisitions among enterprises. Financialeffects of the acquisition is reflected in the success of a mirror, then the merger is exactlywhat business brings financial effect? So this paper merged with Salt Lake Potash Group as acase study of a subsidiary to absorb the financial effects of the merger of the parent company.Firstly, through the analysis of domestic and foreign scholars on the financial effects ofmergers and acquisitions research concluded that most scholars believe that the acquisitionwill bring for business synergies and economies of scale. The research shows that thefinancial effect on the definition of theory and no consistent point of view, this article bysummarizing the previous opinion, the financial effect to define the scope-should be fromthe financial effects of the financial indicators of enterprises, market share and the tax effectof the three for analysis. Then, based on the data before and after the consolidated financialstatements of both sides, using comparative analysis of operating conditions were analyzedbefore and after the business combination, the conclusion that the whole merger is successful,enhanced profitability and capacity for existing enterprises, enhance the market share,reducing the tax burden and achieve economies of scale. However, the acquisition has failedto bring good solvency and ability for now, indicating the presence of a large number of bothpre-merger related transactions. Therefore, enterprises should actively expand externalmarkets and diversification of operations, continue to tap the potential for businessdevelopment. The innovation of this paper is: paper selected Salt Lake Potash Salt Lake Group’ssuccessful merger case analysis, and the merger of the way: a subsidiary merger under thesame control of the parent company, the domestic rare case of such merger; in this paper,select a specific case analysis to verify the financial effects of the business combination undercommon control brings to select cases relatively new.