Research On The Performance Of Mergers And Acquisitions In China's Steel Companies

The steel industry,known as industrial grain,is also the foundation of national economic construction in China.Western countries have established a new order for the development of the steel industry through the large-scale mergers and acquisitions as early as the last century.Now the world economic slows down,the steel industry has appeared the phenomenon of overcapacity in the global range.And Chinese steel industry paid attention to the expansion without the quality of steel products at the early stage,which hinders the sustainable development of the industry.At the same time,the domestic economic slows down.These two factors lead to the iron and steel industry surplus of instruction,quantum and cycle.Under this background,the state put forward an approach named four batches to resolve excess capacity,which is expanding domestic demand,implementing the out exploring strategy,merging enterprise to optimizing the organizational structure and implementing strictly the environmental protection law.In other words,M&A is an important policy for the iron and steel to optimize the industry structure,balance the business layout and to dissolve the excess production capacity.In addition,Chinese steel industry tends to make a profit in the industry boom and capture the market when the industry is in recession.Therefore,considering policy-driven and their own needs,domestic steel industry will appear a new wave of M&A in the next years.Because of the complexity and the diversity of the Merger & Acquisition,not all of the M&Aactivities will succeed.Taking the realistic situation of domestic steel industry as consideration,it is necessary to analyze Steel corporations` performance.At the same time,because of the difference of samples,research methods and classified methods of M&A,it is still not formed consistent conclusions.So under the background of the current situation,it is meaningful for practice and theory to analyze the M&A performance.Firstly,this paper combs the related concepts and theories of M&A,on the basis of previous scholars on the results of M & A performance research.Secondly,the articleanalyzes the development status of Chinese steel industry in the perspective of supply and demand,and expounds the history and distribution characteristics of M&A about domestic steel industry,and combines the world steel industry M&A process with China to compare its shortcomings.Thirdly,the accounting method is adopted to 31 cases which occurred M&A in domestic steel industry from 2005 to 2013.In the empirical analysis,the paper chooses 12 financial indicators to carry on the descriptive statistical analysis of M & A performance and selects six indexes after the KMO test.Then the paper carries on the comparative according to three types of classification,such as the property rights of subject,range of M&A and pattern of M&A,based on the comprehensive performance scores in the empirical analysis part.Fourthly,according to the empirical analysis,it is concluded that the performance of M & A performance of steel industry in Chinais not ideal,but there are more than 40% of the enterprises have benefited from M & A.Generally speaking,the M&A performance ofcentral enterprises and private enterprises is higher than that of local state-owned enterprises,conglomerate combinations and horizontal mergers are better than vertical merger and inter-provincial integration is better at improving corporate performance than local integration and transnational integration.Finally,this paper puts forward some countermeasures and suggestions on M&A for Chinese steel enterprises from aspects of government and enterprises,according to the results of empirical research.