A Study On The Wealth Effect Of Grafting Into The Internet Industry

Under the background of the transformation of Chinese economic structure,China's economic and industrial integration and upgrading process is accelerating,to especially clothing enterprises.With the rapid development of the Internet information age,"Internet +" was officially written into the government working report,the traditional industry and the Internet further integration has risen to the level of national strategy.The transformation and upgrading of garment enterprises to the Internet field and the integration of mergers and acquisitions have become the development trend of the apparel industry.Under the guidance of the central policy,many garment enterprises through the merger and reorganization of the way to the Internet field transformation.This kind of mergers and acquisitions to the Internet industry can bring new performance growth to the enterprise,at the same time,it will bring the risk of the choice of strategic direction,integration of resources after the merger and many other risks.In the new normal environment of the Internet,clothing enterprises through the acquisition of the Internet to expand its field,can this behavior give enterprises a positive value effect?Based on the theory of effect theory and market forces theory,along the“the analysis of the status quo of M&A——Case Study-M&A wealth Effect”of this logic framework.Firstly,the status quo of mergers and acquisitions in the industry and the post-acquisition value effect are analyzed.Secondly,the KJT's acquisition of cross-border electricity business is taken as a sample to observe the value effect after the transition and the reason for its positive value effect.Firstly,based on the research results of M&A and value effect,this paper analyzes the transformation of the Internet industry of the apparel industry based on the theory of M&A.Second,the transition to the Internet to the industry path,the status quo and trends of M&A and the impact of the two mergers and acquisitions path analysis;Third,observe the basic situation of KJT mergers and acquisitions,analyze the difficulties faced by enterprises and the advantages what they have;Fourthly,we use the event research method to measure the CAR value of the two cases of the mergers and acquisitions respectively.This paper analyzes the short-term and long-term value effect of the two mergers and acquisitions to the enterprises,and explores the reasons,advantages and risks of obtaining the positive value effect by comparing the financial performance before and after the two mergers and acquisitions.This article found that:First,between 2012 and 2015,horizontal mergers and acquisitions within the apparel industry is still one of the major mergers and acquisitions in the apparel industry,but the mixed acquisition of the Internet industry is also increasing,and gradually become the trend of the apparel industry.Clothing companies are constantly adjusting themselves to adapt to the new challenges brought about by the new Internet.Second,in all mergers and acquisitions,those who mergers and acquisitions of Internet companies,these companies have better financial performance after the acquisition,their stock market is also more optimistic.M&A Internet companies do create value for garment enterprises,but there may be different situations between enterprises,this paper selected a representative case for analysis.Thirdly,through the study of this case,it is found that,from the short-term market reaction,the first acquisition of Internet enterprises in garment enterprises has created wealth for shareholders,and the market performance is good,which is consistent with the conclusion of industry analysis.The second M&A market reaction is not obvious,may be due to the company has been transformed into Internet companies,so that the enthusiasm of the market reaction has declined.From the long-term financial performance point of view,after the principal component analysis of the calculation.After the acquisition,the company's financial performance has increased,indicating that mergers and acquisitions brought a positive value effect to the companies.This conclusion is same with the industry analysis.Fourthly,the reasons for the positive value effect brought by M&A are due to the establishment of reasonable strategic objectives,and the correct selection of the subject matter of the acquisition,access to the market,channels and technology and other resources,resulting in a good business and financial and other synergies.Through the study of mergers and acquisitions in this article,we sum up a few views on the Chinese garment enterprises mergers and acquisitions into the Internet industry:the correct selection of the subject of acquisitions,clear strategic objectives,the establishment of professional talent team,to maintain forward-looking thinking.The conclusion of this paper provides a case study for the garment industry to enter the Internet industry to bring new development to the enterprise,hoping to provide enlightenment to other similar M&A in the garmentindustry.