Research On The Effect Of Horizontal Mergers And Acquisitions Of Leading Enterprises

In recent years,many industries have faced the challenges posed by the general environment of slowing economic growth in the country,including overcapacity,large debt pressure,low industrial concentration,low profit in the whole industry,upgrading of industrial technology,and pressure on environmental protection.In order to promote the development of the industry,the state encourages enterprises to achieve industrial upgrading through mergers and acquisitions.In recent years,more and more companies have achieved industrial integration through horizontal mergers and acquisitions.However,the horizontal mergers and acquisitions among leading enterprises will increase the market power of enterprises and may harm the market competition environment,which is not conducive to the healthy development of the industry.Horizontal mergers and acquisitions between leading companies each time bring significant impact to stakeholders,and cause widespread concern in all sectors of society.Therefore,the inspection of the horizontal merger and acquisition effect of leading enterprises has a strong practical significance.So whether the horizontal mergers and acquisitions of leading enterprises in China improve the efficiency or strengthen market forces?This article selects Billions,the leading enterprise in the titanium dioxide industry,to acquire Lomon as the research object,and tests the effectiveness of horizontal mergers and acquisitions based on efficiency theory and market power theory.This paper selects representative horizontal mergers and acquisitions of leading enterprises,and examines the effect of horizontal mergers and acquisitions of leading companies from the three perspectives of market response,synergy and market power.Firstly,the event research method is used to test whether mergers and acquisitions companies are more likely to generate synergies or market forces from the perspective of market reaction,and to calculate the cumulative abnormal return rate of the merger competitors,upstream suppliers,and downstream customers of merger and acquisition parties near merger declaration day.Conduct the analysis.The market reaction results of the sample companies support the hypothesis of market power theory.Then through the financial indicators to verify the synergies produced by the merger and acquisition sides,and then through DuPont analysis to dig deeper reasons for changes in financial indicators.The result proves that the efficiency gains of Billions's acquisition of Lomon are not significant.Finally,from the market share and the barriers to entry into the industry,the market power gained after the M&A was tested.The research found that after the acquisition of Longyi Titanium,Li Lilian increased its market share and raised the price bargaining power,which significantly increased the market power.And due to policy restrictions,technical limitations,and the exclusive behavior of Salisbury,the titanium dioxide industry has formed barriers to entry,which will consolidate the market power of Sililink.Through the above-mentioned research,it was discovered that Billions's acquisition of Lomon significantly increased its market power.The research results of this paper show that horizontal mergers and acquisitions by leading companies will significantly increase market power while the synergy effect is not obvious.The relevant regulatory authorities should pay attention to the possible monopolistic phenomenon.The research results in this paper broaden the usefulness of accounting information decision-making,and hope to provide reference value for the relevant regulatory authorities and the company's M&A decision-making.