Research On The Motivation,Pricing And Performance Of Progressive Cross-border M&A

Since entering the WTO,Chinese companies are eager to get out of the country and international standards,and cross-border mergers and acquisitions have become an important means of this strategy.From the history of China's cross-border mergers and acquisitions in the past two decades,the total amount of cross-border M&A transactions of Chinese companies in 2000 was about 1.776 billion US dollars.In 2017,the total amount of overseas M&A transactions of Chinese companies has increased to 120.8 billion US dollars.Both the number of transactions and the total amount of transactions have a huge increase.However,while the number has increased dramatically,the quality of Chinese companies' cross-border mergers and acquisitions is not optimistic.According to research conducted by relevant institutions,less than 10% of M&A events by Chinese companies in recent years have been considered successful,and most of the remaining 90% of M&A events have been lack of cooperation.One-time mergers and acquisitio ns.Although this kind of merger and acquisition also carried out a large number of due diligences in the early stage,due to the information asymmetry,the merger party may not only pay a high M&A premium,but also in terms of personnel management and corporate culture in the post-merger business process.The integration will also face difficulties,resulting in poor performance of mergers and acquisitions.In view of the above problems,this paper takes the progressive cross-border M&A method with cooperation basis and multiple acquisitions as the research object,and discusses the motivation,pricing and performance of the M&A process.In terms of research methods,this paper combines theoretical analysis with case studies.In the theoretical research part,this paper reviews the related literatures on mergers and acquisitions at home and abroad and summarizes them.It introduces the categories,motivations,pricing and performance analysis of cross-border mergers and acquisitions.In the case study part,this paper selects the case of MOONS' Electric's progressive acquisition of APPLIED MOTION PRODUCTS,INC.(AMP).The analysis shows that the motivation of MOONS' Electric's progressive cross-border M&A mainly includes the following aspects: Strengthening the brand of MOONS' Electric Influence;acquire AMP advanced technology and talents,enhance creative capabilities;expand marketing network and enter the North American market;promote the strategic transformation of MOONS' globalization.When discussing the pricing of mergers and acquisitions,this paper based on the historical development performance of AMP,using the free cash flow discount method,combined with the current risk coefficient values commonly used in the market,predicts the future cash flow of AMP.Through analysis,it is considered that the M&A price in the actual acquisition process is reasonable and beneficial to the acquisition of Fang MOONS' Electric.At the same time,this paper analyzes the financial performance of the company before and after the two mergers and acquisitions in the process of the merger and acquisition of MOONS' Electric.It is found that after two mergers and acquisitions,the profitability,solvency and development capability of MOONS' Electric have been improved.In terms of nonfinancial performance,the internal integration effect of MOONS' Electric after the merger was good;it clearly defined the division of labor and expanded the company's production capacity with AMP;acquired advanced technology and talents;expanded sales and gained more market share;and defined future technological development.Strategy-North American Technology Center.Through the analysis of the above aspects,this paper draws the following conclusions: The long-term cooperation and mutual understanding between the two parties before the cross-border merger and acquisition have laid the foundation for this merger;the gradual mergers and acquisitions with the cooperation foundation are conducive to the clear motivation of the merger,and also It is easy to achieve more favorable pricing for the acquirer and improve the company's performance.At the same time,after summarizing the case of MOONS' Electric's progressive mergers and acquisitions,this paper also obtains the following revelations: Defining the purpose of mergers and acquisitions is the first step for cross-border mergers and acquisitio ns;establishing reasonable pricing is the key to cross-border mergers and acquisitio ns;progressive cross-border mergers and acquisitions are beneficial to mergers and acquisitions.Enterprise integration.