Research On The Performance Of Continuous M&A Of Midea Group

From 2015 to 2016,the domestic household appliances industry is becoming increasingly saturated.It has gone through a stage of rapid expansion and extensive development,and the growth rate has slowed down.The traditional layout of household appliances industry has been unable to meet the challenges in the future.Only by expanding and annexing high-level enterprises in the same industry,opening up new businesses and improving the internal fine management level can the new development of enterprises be promoted.Midea Group adheres to the strategy of "product leading,efficiency driven,global management".In order to transform and upgrade,it has started a series of overseas M&A and expansion activities.This is the largest continuous M&A event in China’s household appliances industry so far,and has great research significance.Therefore,on the basis of the research of scholars at home and abroad,this paper chooses the case of continuous M&A in the United States to study.The main contents of the case are as follows:Firstly,this paper reviews the research status of continuous mergers and acquisitions at home and abroad,clarifies the definition of continuous mergers and acquisitions,the series extended oversea expansion,and the method of continuous mergers and acquisitions performance evaluation.The second is the case introduction.The case introduction part first introduces the overall development trend of the industry,gives the data of operating income and net profit of the home appliance industry from 2013 to 2017,and points out the future development characteristics of the home appliance industry,then introduces the Midea group and the acquisition process,and summarizes the motivation of series M&A of Midea group: improving the global business strategy;expanding the market rapidly;giving full play to the synergy effect;obtaining high-quality technology;entering the robotics industry.It points out the M&A risk of Midea Group.Then is the performance analysis of continuous M&A.Comprehensive application of event study method,economic value added method,financial index method,and the addition of non-financial index analysis,but also increased the comparison of comparable companies.In terms of long-term performance,EVA declined.Then,Dupont analysis method and serial substitution method were used to decompose the return on net assets.It was concluded that the new robots and automation business increased the cost rate and lowered the net interest rate of sales,which led to the decrease of ROE.Then it uses other financial indicators to comprehensively analyze the financial ability of enterprises.The results show that after M&A,the long-term solvency of enterprises has declined,the profitability has declined,the operating ability has risen,the cash cycle needs to be improved,and the net profit growth rate is general.In terms of non-financial performance,after continuous M&A,the market value and brand value of enterprises have been significantly improved,and the robot industry has taken the lead.Finally,this paper elaborates the enlightenment and suggestions.Suggestions for American Group include diversification of financing,emphasis on improving profitability,and strengthening cost and cost control.It also provides reference for other enterprises in the household appliances industry in M&A: selecting appropriate M&A targets;focusing on the promotion of core competitiveness;Conduct a full valuation of the underlying company and then price on the integration after continuous M&A.