Study On Performance Of Horizontal Merger And Acquisition Cases In Aerospace Industry Based On Financial Analysis On Merger And Acquisition Of Shanghai Airlines By China Eastern Airlines

Acquisition and reorganization is the everlasting theme of capital market,all enterprises which change from being small to being large and remain unshakable and become even firmer as time goes by are results of multiple times of consolidations by merger and optimized combinations throughout world economic history. Mergers and acquisitions of listed companies in our country were started in the beginning of 1980 s, quickly developed from 1994 to 1998, entered the stage of standard operation from 1999 to 2005 and the stage of market leading since reform of non-tradable shares. Mergers and acquisitions of listed companies step to normalization, institutionalization and marketization gradually. During this period, air transportation industryalso experienced multiple times of horizontal merger and acquisition: Hainan Airlines obtained the controlling stakes of eight companies of Chang'an Airlines, Xinhua Airlines and Shanxi Airlines and so on, and Southern Airlines merged Xinjiang Airlines and Northern Airlines, Air China merged Southwest Airlines, the continuous merger and acquisition of air transportation industry expand the scale of state-owned airlines, which forms the competition situation based on four groups in civil aviation industry. The industrial merger and acquisition has become necessary measures of domestic airlines to be larger and stronger to compete with international aviation giants,but the performance of merger and acquisition is worth to be studied deeply,which lays good foundations and indicates directions of merger and acquisition in the future. This paper puts particular emphasis on financial analysis before and after merger and acquisition of Shanghai Airlines by China Eastern Airlines, short-term performances and long-term performances of merger and acquisition are studied with event study method and financial index analysis method respectively, the change of competitiveness of company before and after merger and acquisition is studied with the comparison of data and average data of other competitors in aviation industry,thus to analyze synergistic effect produced in merger and acquisition, and the merger and acquisition performances of Chinese air transportation industry isstudied with the case of merger and acquisition of Shanghai Airlines by China Eastern AirlinesThe results obtained from financial analysis show that the merging of China Eastern Airlines and Shanghai Airlines is successful, no matter seeing from the analysis results of short-term performances or long-term performances, the whole profit ability, operation ability,development ability and ability of creating cash flow are all improved obviously, the structure of assets and liabilities is improved, the synergistic effect of industrial integration is given play to and the competitive advantage is strengthened. The shortcoming is that the utilization efficiency of China Eastern Airlines on obtained good resources and rapid increasing net asset after merger and acquisition is low, and its management level of integrating resources and improving efficiency still needs to be improved.