Performance Analysis Of CNOOC Limited Acquisitions Of Nexen

With the globalization of world economy,cross-border M&A is playing an increasingly important role in the world economy.Enterprises adopt the method of transnational mergers and acquisitions in order to circumvent trade barriers effectively,accelerate the process of internationalization,and expand its size to obtain resources and technology they need,etc.The outbreak of the financial crisis in 2008 provides a good opportunity for Chinese enterprises to go abroad.Facing the sharp depreciation of the abroad assets,Chinese enterprises speed up the pace of mergers and acquisitions and get overseas assets at a low price.Especially for companies of energy and resources,under the condition of resource shortage in our country,obtaining resources from abroad through cross-border M&A to alleviate the pressure of domestic resource constraints.According to the present results of M&A of Chinese enterprises,the number and the amount of M&A is large,but the success rate of M&A is only 67%,including many cases which are successful transactions but failed finally,such as TCL acquiring Alcatel,SAIC acquiring Ssangyong,BenQ acquiring Siemens and so on.Although these M&A cases are successful,the poor performances after the mergers and acquisitions lead to the final failure.So timely analysis of the performance of M&A enterprises will help us to find problems and take measures in time,and sum up experience and lessons to provide reference for our enterprises who are to go abroad.On the basis of case study The paper uses the qualitative and quantitative analysis method to analyze the performance of CNOOC Limited buying Nexen.First,the paper elaborates the paper’s research background,research significance,the relevant domestic and international literature review,the research content,etc,and then clarifies the purpose and train of thought.Secondly,the paper combs the theoretical basis for M&A performance,including the connotation and motives of M&A performance,the influence of M&A on performance indicators and the evaluation method of M&A performance,and then introduces performance evaluation system of this paper.Then,it details the basic situation of CNOOC Limited and Nexen,the process and motivation of M&A.Then it analyze the performance of CNOOC Limited buying Nexen from multiple perspectives.In the capital markets,M&A didn’t enhance the value of the company in the short term,CNOOC Limited’s share price fell more than the same industry competitors in medium and long term,the performance was poor;In terms of corporate financial management,within a year CNOOC Limited’s profitability changed from bad to good after mergers and acquisitions,net profit and operating income keep increasing,but the solvency and operational capabilities deteriorated;one year later,all the financial index deteriorated seriously under the condition of decreasing international oil prices;In the field of matching degree of M&A results and motives,the M&A purpose achieved in a certain degree,but the ability of fighting against the international oil price risks weakened.Finally,it provides improvement suggestions on the current performance of CNOOC Limited,and summarizes the revelation on the future acquisitions of oil companies.