The Case Analysis On The Motive And Performance Of Zhongheng Group Merger

This case study analyze their motives and effects produced from the case that Zhongheng Group continuously acquisited two companies to solve its own risk. Zhongheng Group acquisited Wuzhou Shuangqian Industrial Co., Ltd. that belongs to the health food industry in 2010, and then acquisited Heilongjiang Dinghengsheng Pharmaceutical Co., Ltd. that belongs to the pharmaceutical industry in 2013. the first analysis of the motives of the two companies' merger, then select from 2008 to 2014 a total of seven years of financial data.Combined with these years memorabilia of Zhongheng Group analyze the EVA,financial synergies, operating synergies and management synergies arising from these two acquisitions.Finally proposed some elements relating to protecting the success of merger.Analysis of synergies in the financial statements do not just stay in some measurable indicators, but dig some inherent substantive changes, such as the phenomenon that the asset size is doubled but there is only a little net profit. Analysis showed that diversification is a major motivation in the mergers and acquisitions of Zhongheng group. The result of the effect analysis showed that the Zhongheng group basically achieved financial synergies and operational synergies,but management is not obvious synergies Overall, the end result is the Zhongheng group achieves a good diversification of its purpose in these two acquisitions,.It plays a good role in promoting development in the future.