Performance Study On Transformational M&A Of Founder Motor

The economy of our country experienced a 30 years' high speed increase since the reform and opening-up policy.However,after the financial crisis in 2008 the speed descended and our economy entered a new normal,at the same time excess capacity and higher cost of labor happened.In this way,traditional manufactures suffered a huge challenge.What's more,both income and profit of some companies started to decrease.Under such a background,companies tried to transform their business to search for new growth of income and profit.Internal R&D and R&A can both help a company do a new business in a new industry to transform its business.Internal R&D always takes too much time and technical barrier makes it difficult to succeed in a new industry and so m&a becomes a choice of many companies.Both quantity and amount of listed companies' transformational M&A are increasing significantly from 2011 to 2016.This article analysed the motive of Founder Motor's transformational M&A,presented M&A process and the pattern of payment,and analysed the performance of the Transformational M&A.In particular,the article used event study to analyse short-term performance,used management financial statements to analyse middle-term performance,and used brand value and invest in R&D to analyse long-term performance.All these 3performances are positive.On this basis the author summarized the reason of the successful transformational M&A,and suggest companies to buy right target firm in right time.And also a right pattern of payment is important.Since management financial statements are more reliable than general financialstatements,the author hoped management financial statements can be widely used.