The Motivation And Performance Analysis Of BTG HOTELS' M&A

In the past decades of reform and opening up,the hotel industry in China has experienced a huge growth.Nowadays,the domestic hotel industry has been able to provide consumers with all kinds of services from luxury hotels to economic hotels.Since the reform of state-owned enterprises,the wave of M&A in China's capital market of the hotel industry has surged and the price has been rising hugely.Through M&A,China's hotel industry is sending a signal to the global capital market: China's hotels are through their own efforts and the power of capital to achieve their own goals of internationalization and diversification.This article selected the BTG M&A buying Home Inns Group and introduced the background and development history of M&A parties to understand the overall situation of the hotel industry and the operations of the M&A parties.First of all,from the motivation of both parties to mergers and acquisitions to analyze,understand the motivation for the transaction to be carried out as well as the intentions of both parties.Due to the weakness of the overall economic situation in recent years and the country's vigorous restrictions on the “Three Publics” consumption,the business of the BTG hotel in the luxury and high-end hotel industry has shrunk drastically,and its net profit has seen a negative growth for two consecutive years.In pursuit of transformation,we chose to conduct M&A activities for Home Inns,which ranks No.1 in China.Since its establishment,Home Inns has grown into the country's leading economy and express chain hotel group.However,due to the improvement of the macroeconomic situation and changes in domestic consumer preferences,VW's demand for hotel accommodation services has shifted from merely pursuing fast and convenient hotel stays to mid-range hotels that have certain requirements for hotel accommodation and hotel quality.For example,Home Inns Group has chosen to return to the domestic capital market as the first choice.A wholly-owned subsidiary of Travel Hotel.Secondly,the article uses event research method and financial index analysis method to analyze the business performance of BTG Hotels before and after this M&A and concludes that M&A can bring about a rapid increase in shareholder wealth for the company in a short period of time.However,over time,the impact of mergers and acquisitions on the company's stock prices will gradually weaken,the company's stock prices will gradually return to the normal range;In addition,after analysis found that mergers and acquisitions on the financial performance of the Brigade hotel's long-term impact,within two years after the merger and acquisition,all listed companies' operating indicators have been significantly improved.It can be seen that this merger has brought a positive,positive and sustainable impact to the company.The article concludes with the revelation and conclusion of this merger case.