Qingdao Haier M&A General Performance Of The Household Appliances Department

Appliance industry is an important part of China's manufacturing industry,also is China's traditional advantageous industries.Since 2014,China's economy has entered a new normal.Under the crash of sluggish demand growth,the rapid development of mobile Internet and the upgrading of consumption,China's home appliance enterprises are facing more intense competition.The leading enterprises represented by Haier,Midea and Gree have declined in performance and have sought new growth points through the way of M & A.However,the results of empirical studies show that the post-M & A performance is affected by many factors,such as the mode of payment and the type of M&A.Generally speaking,seldom there are success in business performance improvements after M&A in China,and the failure cases of cross-border M & A are common.Whether the successive mergers and acquisitions of household electrical appliance enterprises have brought about positive value creation,or they have undermined the value of the enterprises and the background of these cases still remains to be studied.Under the guidance of event research method and economic value-added thought,this paper takes Haier's acquisition of general household appliances as an example,which is the largest case in the history of Chinese appliance industry.Starting from the industry background of the pre-merger company and its own financial situation,we study the stock price response and the value created for investors to evaluate the performance improvement after the merger.The results show that,although mergers and acquisitions greatly enhanced the leverage of enterprises in the short term,it still got positive feedback from the stock market,and acquired significant abnormal return.In the 1-2 years after the merger,the company reversed the situation of EVA declining.EVA presented to be a steady growth.The profitability,operational capability and growth capability of enterprise all improved significantly.However,its solvency declined temporarily.In a word,M & A achieved positive value creation for investors.The results of this paper provide useful inspiration for the future mergers and acquisitions of China's home appliance enterprises.