A Study On The Performance Of Mergersand Acquisitions Among State-owned Enterprises

In 2016 February the Sate Council publish Comments on the development of the steel industry to eliminate excess capacity 。 From 2015,China will reduce the capacity of crude steel production by 1 to 150 million tons over the next five years.In September 2016,SASAC announced the restructuring of Baosteel and Wuhan Iron and Steel(Group)Company.According to the data released by the international iron and steel association in June 2016,by the end of 2015,Baosteel had achieved 3494 million tons of crude steel in 2015,ranking the fifth in the world in crude steel production.In 2015,WISCO produced 25.77 million tons of crude steel,ranking 11 th in the world.Despite the large scale of steel production,the actual operating performance is poor,especially in the case of WISCO,which has suffered huge losses in successive years.In June 2016,Baosteel and WISCO issued suspension notice,and began to plan strategic restructuring.After three months of program research,the two sides determined the merger plan and formed the Baowu Iron and Steel Group.In the process of enterprise merger,acquisition and reorganization,Baosteel in WISCO existing resources,manpower,new integrated market business,play a synergistic effect,the performance is improved greatly,as a subsidiary of WISCO group operating conditions improve.Baosteel’s merger with WISCO is in line with the supply-side structural reform and the policy of "de-production",while meeting the development needs of the enterprise itself,so as to promote the reform of the steel industry in China.This paper first analyzes the internal and external causes of Baosteel’s merger with WISCO,introduces the confirmation and merger process of the merger plan,and analyzes the impact of the merger on both sides.Then collecting and sorting of Baosteel’s 2014-2017 financial data,from the financial indicators and non-financial indicators,the angle of economic value added three operating performance change before and after the merger of Baosteel.In terms of financial indicators,compared with Baosteel’s announcement of the changes in solvency,operation ability and profitability of WISCO,the changes in cash flow and profit changes were analyzed in detail.Baosteel economic value added nearly three years by calculation,analysis of the relationship between EVA and net profit,return on equity,discussion after the merger of Baowu Iron and Steel Group economic benefits.Finally,the paper analyzes the non-financial indexes of Baosteel’s innovative development ability,employee training management,production and service quality.Whether the effect of this combination has reached the expected goal,it needs long-term tracking and observation.The merger of Baoshan steel and Wuhan Iron and steel company has just been used in the past year.The data collected in the process of writing are limited,but the analysis of financial and non-financial indexes,quantitative analysis and qualitative analysis are combined to analyze the change of performance of Baosteel reasonable and complete.It has a certain research value,and provides valuable experience for the future state-owned enterprise reform and performance analysis.