Evaluation Of The M&A And Decision Of The Real Estate In China

In recent years,with the global integration process speeds up,China's market economy reform deepening,mergers and acquisitions have become a major measure for accelerating the expansion of enterprises,particularly in the real estate industry,mergers and acquisitions strategy has become the new norm in the management of real estate companies.The development mode of real estate companies has undergone fundamental changes.From the early stage which is characterized by rapid expansion,to the stage which enterprise constantly pay attention to the land reserve mode and financing ability,finally into the period which is characterized by industrial agglomeration.At this stage,the industry concentration is increasing,and there is a huge wave of mergers and acquisitions in the real estate industry.Whether it is project decision-making,due diligence,risk identification,program design in the early stages of mergers and acquisitions,or post-investment management after completion of mergers and acquisitions,business plan design,production and sales matching,etc.all test the merger and acquisition capabilities and management capabilities of different companies.The types of mergers and acquisitions vary,whether horizontal mergers,vertical mergers,or Conglomeration have different effects on companies.Normally,we will quantify the M&A performance of companies to determine whether different merger and acquisition decisions can actually improve corporate governance capabilities and improve business performance.This paper analyzes the performance under different merger and acquisition decisions in order to achieve the purpose of evaluating different M&A decisions of real estate companies.This paper uses the form of case analysis to conduct a research.It selects the combination of event research method and factor analysis method,and selects the classic cases from a series of mergers and acquisitions completed by Sunac in recent years.The case of horizontal merger was selected Sunac take over 41 subjects of the company's equity and debt of Legend Land in 2016 September for 13.8 billion.The case of Vertical merger Select Sunac mergers 13 brochures and 76 hotel events of Wanda in July 2017.The case of conglomeration selecet Sunacmade a 150.41 billion yuan acquisition of the 8.61%stake in letv and 15%of Letv film,and Letv Zhixin 33.4959%of the shares in January 2017.The event research method and factor analysis method were used to study the market performance and financial performance of the these M&A cases,and the conclusion was drawn.In terms of market performance,vertical mergers and acquisitions and Conglomeration can significantly increase the company's market performance in the short term,while horizontal mergers and acquisitions have a negative impact on the company's market performance in the short term.In terms of financial performance,Conglomeration will significantly reduce corporate financial performance,while mergers and acquisitions in the same industry will have no significant effect on financial performance.Among them,horizontal M&As will result in a slight decline in financial performance,while vertical M&As will cause financial performance to rise slightly.Based on the research results,this paper evaluates the three types of real estate M&A decision-making,and proposes the policy recommendations for real estate companies to improve M&A performance from the internal and external aspects of the company.