Performance Research Of Cross-Border Mergers And Acquisitions Of Keda Group

With the gradual slowdown of China's economic growth speed in recent years and the decline of the overall demand within some industries,some enterprises which have been deeply engaged in some traditional industries for many years and established a relatively stable status in the industry inevitably encounter bottlenecks in their progress and have to bear an increasing pressure to maintain performance growth,which force some enterprises in traditional industries to adopt the way of extension development,just through cross-border Mergers and Acquisitions(M&A)of enterprises in some emerging industries to achieve strategic transformation and find new profit growth opportunities.However,because of the uncertainty of M&A itself,cross-industry M&A will bring more serious information asymmetry,so cross-border M&A will bring more diverse and more unpreventable risks for enterprises.Based on the analysis of case study method,this paper selects the case of Keda Group's cross-border M&A of five enterprises in internet marketing industry in 2015 as the case study object.In the analysis of the process of Keda's M&A: Firstly,this paper introduces the current situation of Keda Group and five targets before M&A and analyses the characteristics and development status of the industries of both sides.Secondly,this paper combines relevant theories to analyze the motivation of cross-border M&A.Finally,this paper introduces the process and the changes of the company and how Keda evaluates its M&A.In the research on the performance of Keda's M&A: Firstly,the market performance of Keda in 30 trading days before and after the event is compared and analyzed by using the event study method.Secondly,from the financial point of view,this paper evaluates the financial performance of Keda after M&A from four aspects.Finally,considering that the financial indicators may not fully reflect the performance of cross-border M&A on Keda Group,this paper analyses the performance of Keda Group from the process perspective,customer perspective and learning and growth perspective,which is the three non-financial perspectives of the Balanced Scorecard.Through the study of the case,the paper draws the conclusion that the overall financial performance of Keda's has improved after M&A,but its short-term debt paying ability and the management ability of fixed assets still need to be enhanced.At the same time,Keda Group better achieves integration with Internet marketing subsidiaries from the physical space and internal organizational form in the process perspective,mainly through the unification of strategic direction,the improvement of incentive management system,the establishment of multidivisional structure and the establishment of investment companies and funds;In the customer perspective,Keda Group expands the scope of customer groups,concentrates on automobile marketing customers and establishes its own brand competitiveness;In terms of learning and growth,Keda Group improves the investment in Research and Development(R&D),overall quality of management and employees,but in the follow-up development,Keda still need to pay attention to the training of R&D personnel and timely review and enhance their own capabilities according to the requirements of new business.Therefore,some suggestions are put forward for the follow-up development of Keda Group: Firstly,it should pay attention to the short-term debt paying ability and the operating ability in the process of self-development,balance the relationship between operating cash flow and current liabilities,increase its capacity to manage fixed assets and current assets;Secondly,it should strengthen R&D expenditure and professional personnel training to ensure that it matches the company's strategic direction;Thirdly,it should prevent excessive pursuit for hot topics and avoid losing the control over operating risks;Fourthly,it should guard against the goodwill impairment risk and avoid ignoring the real value of the target of M&A because of blind expansion;Finally,the founders need to be on guard against losing control of the company by introducing outside shareholders after acquisitions.The innovations of this paper are reflected in the following two aspects: On the one hand,the object of this case chooses cross-border M&A because of the restriction of development in the original industry,and the case object chooses the Internet marketing industry which emerges with the development of Internet information technology.Therefore,the study of this case could not only explore the research on the problems of M&A brought by the transformation to Internet-related industries,but also find the innovation in post-purchase integration.On the other hand,in the past,the evaluation of M&A performance mainly focused on the financial perspective.This paper considers three non-financial perspectives of the Balanced Scorecard method,and strives to better demonstrate the M&A performance achieved by both sides of the case.