A Case Study On Monarch Sanitary Ware Acquiring Oceano Ceramics

During the "Thirteenth Five-Year Plan" period,China's economic development speed has changed from high-speed growth to medium-high speed and steady growth,and economic development has entered the "new normal" stage.As the contradiction between economic development and environmental protection is becoming more and more acute,the country's requirements for energy conservation and environmental protection are getting higher and higher,the development of ceramics and sanitary ware industry will face the challenge of raising resources,energy and environmental protection costs.At the same time,with the progress of the country's urbanization and the promotion of a comprehensive well-off society,the scale of construction in China's modernization process will maintain a certain amount.There will still be a large demand for building ceramics and sanitary ware products,but the increase will be reduced yearly.At present,there are a large number of production enterprises in the building ceramics and sanitary ware industry in China,with poor product quality,high energy consumption and high pollution.Under the background of structural adjustment and transformation of the whole industry,a large number of low-end production capacity in the industry will be phased out or acquired in the future.Enterprises with brand advantages,technological advantages,channel advantages and capital advantages will have huge development space.Combination between strong enterprises or integration between strong and weak enterprises will become an inevitable path for the development of the industry,and brand concentration will gradually increase.Many M&A of building ceramics and sanitary ware enterprises in the past few years,the M&A of Monarch Sanitary Ware of A-share listed company acquiring Oceano Ceramics of the new three-board listed company has a certain representativeness and demonstration in 2017,and the two parties have strengthened their alliance and realized resources sharing and advantages complement each other,and this is a "snake swallow elephant " type of case that is less likely to happen in reality.The operation and performance of Monarch Sanitary Ware in the entire merger case has strong reference significance for future M&A of building ceramics and sanitary ware industry.This article selects the merger of Monarch Sanitary Ware and Oceano Ceramics as the research object and uses the methods of system analysis,deductive reasoning and comparative analysis to elaborate the whole case.This paper is divided into four chapters: The first chapter is the introduction,including the background and significance of the research,the review of theory of M&A,the framework of the paper and the research methods;The second chapter is the case introduction.It mainly introduces the two companies involved in the M&A in detail,then introduce whole M&A process from the aspects of M&A scheme and implementation results;The third chapter is case analysis.This is the focus of this paper.It analyzes the M&A motivation,the advantages and disadvantages of both sides,the process of M&A,and also explains the M&A valuation methods and payment ways and the risks involved in the M&A,Then discuss the performance and impact of the case;The fourth chapter is the case revelation.through the analyses of this case,it will provide some experiences for the M&A activities of China's building ceramics and sanitary ware industry:The first is to create synergies through complementary advantages and resource sharing;The second is to make full use of the valuation difference in capital market to achieve the type of “snake swallowing elephant”;The third is to use share-based payment methods to hold the company's control;The fourth is to closely cooperate with intermediaries to minimize the risk of M&A.