A Case Study On The Synergy Effects Of TQ Company Cross-Border M&A

The M&A activities of enterprises can reconfigure the market resources,and it's also an important way for enterprises to expand the scale,improve the industrial chain and access to excess profits.Since China's accession to the WTO,more and more enterprises have participated in cross-border M&A.In such an environment of economic globalization,facing all kinds of opportunities and challenges,TQ company as Chinese lithium industry leader and the world's best lithium ore extraction company opened its road of cross-border M&A.By merging TLS company,who is the world's largest solid lithium supplier,and the owner of the world's largest lithium mine,TQ company has improved its upstream industry chain,accessed to valuable strategic resources and expanded its scale.It makes TQ company achieve the global distribution of production capacity and market,and enhance the international competitiveness.The synergy effect of M&A is not only the motive of M&A activity,but also the ultimate goal of M&A.And it is an important standard to measure the success of M&A activity.In recent years,a number of Chinese cross-border M&A activities have not achieved synergies,or even ended in failure.It dues to the fact that the enterprises did not match their development strategy and M&A plan,or not carry out effective resource integration and risk control.Therefore,the paper takes the cross-border M&A case of TQ company and TLS company as the basis to study the synergy effects of cross-border M&A.First of all,from the long-term perspective,the paper use the discounted cash flow model to predict the future cash flow of TQ company before and after the M&A,then discount them to M&A year to estimate and compare the intrinsic value of TQ company before and after the M&A to check the synergy effects.Then according to the past financial data and non-financial facts,based on the general classification system of synergy effects,this paper makes qualitative and quantitative analyses on the synergies of TQ company's M&A activity from three aspects: operating synergy,financial synergy and management synergy.The paper argues that the cross-border M&A between TQ company and TLS company is very successful and achieved synergy;the synergy mainly dues to the fact that TQ company matched its development strategy and M&A plan;and effective resource integration and risk control are important factors to maximize synergy.The research process and conclusions of this paper have important reference value to other enterprises' cross-border M&A,and reference significance to the research on the synergy effects of M & A.