The Research On The Motive And Performance Of Cross-industry M&A

Merger and acquisition is an important means for enterprises to expand their scale,realize diversification,enhance their competitiveness and achieve strategic development.Nowadays,the world has experienced six waves of mergers and acquisitions.As China’s economic development is later than the Western countries’,China’s corporate mergers and acquisitions history is relatively short.However,China has achieved four times the peak of corporate mergers and acquisitions.With the continuous development of China’s economy,the number and amount of mergers and acquisitions continuously increase in China.Since from the merger and reorganization tide in 2009,cross-industry mergers and acquisitions have surged.Since 2013,the number of mergers and acquisitions that for diversification strategy and business transformation has reached 1,275,and the total transaction value is more than 700 billion Yuan.Statistics found that the Financial,Online games,Environmental protection,the Internet,nonferrous metals and other fields have become the main direction of cross-border.And due to get involved in the hot areas,most of the stock prices rose sharply.Cross-industry mergers and acquisitions gradually play an important role in the history.Unlike mergers and acquisitions in the same industry,cross-industry mergers and acquisitions get into a new industry which causes the higher risk.Therefore,a high failure rate exists in cross-industry mergers and acquisitions.How to successfully carry out cross-industry mergers and acquisitions,and how to ensure the performance of the enterprise after merger,which are need to be studied in this essay.This paper chooses the case of SR shares mergers 37 play company as a case study.And based on M&A related theoretical knowledge,which also combined with the case analysis.On the basis of reviewing the relevant literatures at home and abroad,the theoretical part illustrates the concept and characteristics of cross-industry mergers and acquisitions,summarizes the main motivations of cross-industry M&A and the performance evaluation methods.In case analysis part,paper selected SR shares mergers 37 play company as a case study.First of all,paper introduces and analyzes the basic situation of both sides of the merger as well as the industry.Then the process of cross-industry mergers and acquisitions is described in detail,and the motivation of M&A is analyzed.At the same time,it analyzes the performance of cross-industry M&A from three aspects: financial performance,market performance and economic added value.Finally,through the case analysis,the paper summarizes the successful experience of cross-industry mergers and acquisitions and puts forward the universal proposal to provide reference for other enterprises M&A.Through the case analysis of SR company merger 37 play company,it is concluded that cross-industry mergers and acquisitions can improve the operating performance,shareholder wealth and generate synergies.Also supporting financing can relieve funding pressures.But the company should pay attention to the following questions:(1)A correct evaluation price,(2)The appropriate payment,(3)Choose the right target industry,(4)Prepare consolidation measures.This paper is divided into five parts.The first part is the introduction which introduces the background,meaning,literature review,research ideas and methods,research contents and framework of cross-industry M&A.The second part is the theoretical overview of cross-industry mergers and acquisitions,which is the theoretical part of this article.Including the concept and characteristics of M&A and cross-industry M&A,the motivations,the performance evaluation method of cross-industry M&A and the acquisitions motivation theories.The third part is to introduce the basic situation of both sides of the merger and acquisition,the industry analysis,the acquisition process,the characteristics of mergers and acquisitions,and the motivation of SR shares mergers.The third and fourth part focus on case analysis,which takes the performance analysis of SR shares mergers from financial performance,market performance,economic value relatively.The third and fourth part are case analysis parts that are the key of this article.The fifth part is the conclusion and enlightenment which provides experience for cross-industry mergers and acquisitions of other enterprises.