The Capital Synergy Effect Research On M&As Of Enterprises

The research on mergers and acquisitions synergies has become more and morepopular in the academic study. But the research on production factors’ capitalallocation structure is very few. The new essential factor capital becomes the key tocreate the core competitive advantages and can do help to promote innovation.Apparently, it is worthy to take in-depth study on the synergies of the various capitalfactors on M&As.This paper take Google acquired Motorola Mobility as the case to analyze thecapital synergy effect on M&A of enterprises. As the current study about thesynergies’ measurement is not mature, accurately measuring synergies produced byeach essential factor capital is impossible. So this paper mainly focus on analyzing theaction mechanism the role each new essential factor capital played in the M&A,combined with the case study.The main contents of this paper include introduction, literature review, casedescription, case analysis of mergers and acquisitions activity, and finally theconclusion of the study. Firstly, this paper gives a brief introduction of the twocompanies, and describes the M&A process. The official website providesinformation about the distribution of spend, the annual report provides R&D expenses,revenues and operating income for data analysis, then gets the basic views with dataabove. In the case study, according to analyzing the motives for mergers andacquisitions, it is concluded that the short-term motivation is to get MotorolaMobility’s huge patent portfolio, the long-term goal is to compete with Apple. Due toMotorola Mobility’s huge losses, Google’s overall performance is unsatisfied. It’sunable to achieve the original long-term development strategy. So Google wants tosell Motorola Mobility to Lenovo, only hold the patents. Then this paper analyzeseach essential factor capital’s synergy on M&A to explore the reason that merger didnot achieve the intended purpose. It’s important to clear that the synergies isconcluded by new essential factor capital’s synergies, traditional essential factorcapital’s synergies and synergies between the new and traditional essential factorcapital. This paper puts mainly focus on the synergies caused by new essential factorcapital. This paper analyzes the internal mechanism of technological capital,knowledge capital and information capital synergies in theory, and combined with the actual company development and situation to analyze each essential factor capital’ssynergies and synergies among essential factor capitals. It can be concluded thattechnological capital generates positive synergies from the patent defense, patentattack, the development of new products and technological innovation. Knowledgecapital and information capital is invisible, they make good effects on long-termdevelopment of enterprises, and related to company’s strategy and environmentchanges. But Google failed to take effective integration measures, so in short term,they bring the negative synergies. The main innovation of this paper is to present themain motivation of M&A synergy in capital view. The disadvantage is that there is nomodel or formulas can be used to accurately measuring. The main significance of thisstudy is that it provides a new view to analyze M&A of enterprises, the new essentialfactor capital can do help for merger decisions.