A Study Of M&A Performance Of Chinese Central Enterprises Merger Local State-owned Enterprises

With the prosperity of China’s economy, Chinese state-owned economy continuesgrowing. Merge&acquisitions (M&A) of central enterprises with local state-ownedenterprise（CLMA）is an important way for strategic adjustment of our country’sstate-owned economy. Thinking and summary the unique process, evaluating theperformance, and analysing the problems of CLMA is significant for state-ownedenterprises reform and the success of the CLMA. As the leading enterprises in theelectronics industry, China Electronic Information Industry Group (referred to as CEC)mergered and restricted Nanjing electronics companies is one of the mostrepresentative cases of CLMA.CEC merged electronic companies in Nanjing, established a Project Company-China Electronics Panda Group, which unified management Nanjing electronicscompanies. This case involved in military confidential information, I can’t obtainmore financial information. When evaluating the performance of M&A,in view of thecentral enterprises, This paper mainly analyzed CEC whether got the M&Amotivation,;in view of the local state-owned enterprises, I select Nanjing Panda andHuadon Electronics Which is tapically for this M&A.By studying this case, we found that CEC had achieved the expected strategicobjectives and policy goals. China Electronics Panda Group who centralizedmanagement of e-business in Nanjing had achieved the economies of scale andsynergies. The M&A performance of Nanjing Panda and Huadon Electronics whichwere local state-owned enterprises had been not significantly enhanced. While it hadeased the payment difficulties of Nanjing Panda, and promoted the market value ofHuadon Electronics. But the economic added value of Nanjing Panda and HuadongElectronics has sustained huge negative, added the profitability and the growth abilityof them also need to be improved.In this paper, I discuss the M&A motives and the M&A strategy of the mergepromoted by central enterprises and local state-owned enterprise. I use the MarketForces Theory to analysis the strategic objectives CEC achieved; and use EfficiencyTheory evaluate the economies of scale and synergies that China Electronics PandaGroup achieved; I use The Financial Index Analysis, the method of share pricemovements, The EVA Analysis to evaluate the M&A performance of localstate-owned enterprise in Nanjing. This paper will enrich the perspective of CLMA Performance Evaluation, It is not only pay attention to market value and enterprisevalue assessment, but takes into account the enterprise performance evaluation for along time. This paper more truly reflected the M&A performance that CEC hasmerged Nanjing electronic enterprise.