On Overseas M&A Performance Of Household Appliance Enterprises Based On Strategic Alliance

Nowadays,with the development of global economy,more and more enterprises begin to go overseas and are achieving rapid development.Home appliance industry as one of the typical,through expanding the business will be the main direction in overseas mergers and acquisitions.Looking back over the past decades,there have been some successful cases of overseas mergers and acquisitions of Chinese home appliance enterprises,but the overall trend is that there are not a few successful cases,among which the establishment of strategic alliance enterprises is a typical success.From the successful experience,home appliance enterprises to improve their market competitiveness,need more room for growth,so it is particularly important to choose suitable for the development of overseas mergers and acquisitions strategy.This paper takes Haier’s acquisition of General Household Appliances as the research object,combines theory with practice,analyses the performance changes before and after Haier’s acquisition,summarizes the experience and lessons of Haier’s overseas M&A,and then puts forward some suggestions for the overseas M&A of our household appliances enterprises.Firstly,the paper combs the literature of strategic alliance and M&A performance evaluation,and makes a comprehensive analysis of the research status in this field.The relationship between the two is defined as alliance,and overseas M&A as a way.In addition,this paper reviews the motivation theory of overseas mergers and acquisitions: Synergy Theory,Enterprise Life Cycle Theory,Market Power Theory,and elaborates the relevant theories of performance evaluation methods: Event Study Method,Financial Index Analysis Method,Balanced Scorecard Method.Then,by analyzing the current situation of China’s household appliances industry and overseas mergers and acquisitions,this paper summarizes the problems of overseas mergers and acquisitions of China’s household appliances enterprises: first,the strategy of mergers and acquisitions is not clear;second,the lack of understanding of the target of mergers and acquisitions;third,the lack of professional personnel;fourth,the lack of intermediaries familiar with overseas M&A.Thirdly,combining with the case,this paper briefly summarizes the acquisition process,using event study method and financial index method to analyze the performance of Haier’s acquisition of General Household Appliances based on strategic alliance in the long and short term,and compares it with other competing companies in the same industry,and analyses the non-financial performance on the basis of balanced scorecard.Finally,according to the results of the study,some suggestions on overseas M&A of household appliances enterprises in China are put forward.This paper uses the event study method to find that Haier’s acquisition event brings positive wealth effect to shareholders in the short run;in the long run,Haier acquires brand effect after the completion of the acquisition.By relying on the brand of General Household Appliances in the domestic market of the United States and the manufacturing capacity of the enterprise itself,it achieves high-revenue and high-profit performance,and contributes to the business income and net profit of Haier.Amount,we can see the positive benefits of acquisition.Although Haier’s profitability is slightly weak,in the long run,Haier is expected to improve its profitability after optimizing the company’s processes,because when two enterprises with different profitability merge,they need to constantly adapt to each other.Operating capacity is also maintained at a stable level of development,and no major changes have taken place.It will take time for the two enterprises to adapt to better operating capacity.This paper puts forward several suggestions on overseas mergers and acquisitions of household appliances enterprises: the determination of mergers and acquisitions objectives is the first step for overseas mergers and acquisitions,enterprises should clarify the mergers and acquisitions strategy and target;cash payment causes thebreakage of capital chain,so enterprises need to learn to use flexibly;mergers and acquisitions focus on financial,operational,cultural integration after mergers and acquisitions;for measuring the performance of overseas mergers Enterprises should also improve their professional evaluation ability in terms of the impact of effectiveness.