A Case Study On M&A Motive And Performance Among Chinese Listed Companies In TMT Industry

Recently, M&A emerges in endlessly in our capital market. On the one hand, industry starts to accelerate the speed of transformation and upgrading. Especially in TMT industry, which is integrated by technology, media and telecom, with its high-speed growth, pressure from its own development, it turns to combine internal accumulation with external expansion at the same time. On the other hand, CSRC solicits opinions from the public on M&A reorganization management measures, designed to reduce interference and let the market play its role, further enhance the activity of M&A of listed companies.This paper takes Blue Focus which belongs to TMT industry in GEM market as an example, combining market current situation, industry characteristics and company strategic plan, to analyze the motives of enterprise M&A. In terms of M&A performance, we first calculate the CAR by using event study method to evaluate whether M&A produces short-term performance; Then, by using financial analysis method, through horizontal and vertical analysis, respectively from the debt paying ability, profitability, operation capacity and growth ability four aspects, study M&A performance in the long run. Through analysis of this example, this paper wants to figure out whether M&A brings benefits to companies in TMT industry and hopes it can provide beneficial reference significance for the future M&A activities.Through this case study we find out that after M&A short-term performance significantly increases, while long-term performance doesn’t. Despite M&A activities have maintain high-speed growth, it affects the behavior of both profitability and operation capacity. Therefore, we conclude the following suggestions: company should pay attention to M&A integration risk, improve the operating efficiency of funds, make corporate strategic orientation explicit and choose M&A companies reasonably. Besides, we also provide some advices related to M&A strategy and technical aspects, meanwhile we encourage market to set up and improve investors’ risk awareness etc.