A Study On Motives And Synergistic Effect Of GIMC's M&A Transaction

As the capital market in our country gets more and more developed and matured,amount and volume of M&A in domestic market continuously break past records.Businesses are more active than ever before in M&A.Since M&A can help promote the development of an enterprise,enterprises attach great importance and give preference to such activity.Under such condition,M&A of listed companies in the country begin to present new characteristics.An obvious trend is that frequency of some listed companies' launching M&A continues to increase.In this aspect,GIMC is a typical example.As the economy grows,macro policies in the country support the development of the advertisement industry,which ensures a bright future for the industry.However,market concentration of the advertisement industry in China is extremely low,while local advertisement companies are weak and dispersed,which makes it necessary to adjust and reform the industry structure.Therefore,M&A becomes a mainstream trend.In this light,study on M&A behavior of advertising companies is of reference value to the sustainable development of the company.After getting listed,GIMC launched M&A transaction frequently—over ten M&A transactions from 2011 to 2015,opening a new page for local advertisement companies.This paper analyzes motives of continuous M&A,synergistic effect of M&A and things to be improved for M&A transaction of GIMC through case study.It also evaluates the implementation of M&A of the company,analyzes problems existing in the implementation of M&A and provides corresponding suggestions from such aspects as object selection,payment method and financial management after M&A.In terms of object selection,companies should avoid acquisition transaction with companies whose capital quality is poor and debt ratio is high.Instead,they should choose companies whose core business has bright prospects and conforms to the development trend of the industry.In terms of payment method,companies should adopt diversified payment method according to their own demands.In terms of financial management,companies should intensify accounts receivable management,attach great importance to the formulation of credit policy,set up credit management department to manage the credit status of customers in a dynamic way and enhance real-time monitoring of receivables,so as to give full play to synergistic financial effect.This paper,by studying the motives and synergistic effect of M&A of GIMC,a leading company in the advertisement industry,aims to offer reference for GIMC in its future M&A transaction as well as for companies who are implementing or will launch M&A plan,to guide their way and prevent them from losing direction.