Analysis Of Motivation And Performance Of The Merger And Acquisition Between Shenyin&Wanguo And Hong Yuan Securities

The competition of industry marketization are increasing,lots of companies seek a variety of ways to expand business scale,consolidate their industry status,to improve the enterprise comprehensive strength.As a short period of time to expand enterprise scale,merger,acquisition and reorganization attracts more and more importance by enterprises to improve the market share means,and the capital market for M&A deal also has a better expectation.Under the background of the system is about to perform and the deepening reform in financial system,the securities industry is facing new development opportunities.However,industry competition intensified with new opportunities.After experienced three times of administrative factors leading mergers,The securities industry is about to usher in a new round of market competition factors leading the merger trend,the M&A between Shenyin & Wanguo and Hong Yuan securities is likely to be the turning point of a new round of market M&A.There are three main objectives of enterprise merger and acquisition,aiming to expand the scale of operation and market share to achieve horizontal integration.The vertical merger is carried out by extending the industrial chain and reducing the operating cost.,the target of the combination of merger and acquisition is to diversify the risk and realize diversified operation.The realization of M&A synergy needs to meet the requirements of the overall strategic perspective,operation strategy,system integration,rights and culture.After analyzing and researching these aspects,enterprises can better promote the M&A process.In addition,the synergy effect of mergers and acquisitions will be affected by the macro-economic development,the industry development stage,the enterprise itself and the trading characteristics.The synergistic effect is reflected in three aspects: operation,management and finance and every aspect have a different mechanism.The operation synergistic effect is produced in scale economy and scope economy and the vertical generation is generated from the optimization and reconstruction of the value chain.On one hand,the management synergy effect is generated by the transfer of management resources from the M&A direction.On the other hand,it originates from the reconstruction of the organizational management mechanism of the new company.The financial synergistic effect is derived from the optimal allocation of cash flow,the synergy of capital and the tax effect of merger and acquisition.The method of net increase in cash flow and EVA can effectively measure the financial synergistic effect from the quantitative Angle.The net cash flow method evaluates the financial synergies by comparing the expected cash flow of the two independent companies before the merger and the expected cash flow of the remaining companies after the merger.And the EVA method evaluates the financial synergistic effect by comparing the changes of the value added before and after the merger.In this paper,the case of Shenyin & Wanguo and Hong Yuan securities merger is analyzed in detail,mainly from the motivation of M&A and performance.From the perspective of macro and micro analysis of the motivation of M&A,focus on the integration after the completion of M&A.This paper also analyzes the acquisition performance of Shenwan & hongyuan through financial ratio method and EVA value method.The enterprise's solvency,profitability and development ability are evaluated before and after the merger.In the conclusion,some problems should be paid attention to in the process of M&A and the risk of integration should be taken seriously after the merger.For securities firms to plan mergers and acquisitions for some reference.