Case Study On The Motivation And Performance Of F Company’s Acquisition Of H Company

"Internet+" has become a national strategic deployment,under this trend,the development of the Internet industry has attracted considerable attention,and has become a significant force to promote the economic development of China.As one of the subdivisions of the Internet industry,in recent years,the number of users and the scale of the online game industry have increased significantly.The high profit margin and development prospects of online parade industry have also attracted many traditional enterprises to enter.Under the circumstance of excess capacity and declining performance in some traditional industries,enterprises are keen to seek transformation and upgrading,to explore new revenue growth opportunities,and to transform to strategic emerging industries is an important direction.Traditional enterprises cross-industry merger and acquisition of online games and other Internet enterprises,in order to adjust business structure,enhance profitability,and achieve transformation and development.This paper chooses F company of building materials industry to merge H company,which is an online game company,as a case study object.I choose the financial data from 2014 to the first half of 2018 as the research foundation,and use event study method and other research methods,to explore the operation mechanism behind the strategic transformation of cross industry mergers and acquisitions in traditional enterprises under the background of "Internet +",which is of theoretical and practical significance.The main contents of this paper include four parts: the first part is the introduction,which mainly introduces the background and significance of the topic,literature review,research content,methods and framework,etc.Secondly,the case is introduced,focusing on the background of both sides of M&A and the development of the industry,describing the characteristics of the process of M&A of Online-Game Company H by F Company for the purpose of implementing strategic transformation.Thirdly,the case analysis part,which focuses on: 1.The motivation of M&A,from the perspective of development potential and market competitiveness,to analyze the motivation of strategic transformation.2.From the perspective of market reaction and financial performance of M&A,the short-term performance,medium-term performance,medium-long-term performance and long-term performance are deeply analyzed and verified.The last part is the revelation of the case,mainly from the formulation of M&A a strategy and the choice of M&A a target,the risk judgement and the degree of attention,the prevention of goodwill bubbles and the risk of cross industry mergers and acquisitions.This paper draws the following conclusions through events and case studies: 1)The short and medium-term market and financial performance are in good condition,the ability of operation and growth has been enhanced,and economic value added has increased significantly..However,the risk of debt repayment has also increased.2)Failure to achieve good integration after mergers and acquisitions leads to increased risk of long-term debt repayment and unsatisfactory long-term performance.3)Cross-industry mergers and acquisitions have not reached the expected goal of strategic transformation,and their experience and lessons deserve attention,especially the key factors that affect the success of mergers and acquisitions,such as inadequate preparations before mergers and acquisitions,selection of pricing methods,policy environmental impact and mergers and acquisitions integration risk.This paper hopes that by analyzing the motivation and performance of M&A of F Company,it can provide some reference for the development strategy of M&A of other enterprises,especially cross-industry M&A.