The Case Study On The Serial M&As Performance Of XEQ Company

In recent years,mergers and acquisitions(M&A)have been becoming more prevalent than before along with the development of capital market.The chief reason of this phenomenon is that enterprises want to adapt themselves to the changes of national strategies.Another reason is the scarce opportunity brought by internationalization of financial markets.Researchers are made focused on changes of enterprise effectiveness caused by M&A and different conclusions are reached in consequence.Many enterprises regard M&A as a method to scale up and promote competence.However,not every enterprise expects to achieve M&A performance.Under this background,this article focuses on issues about M&A combining existing achievements and provides appropriate theory and effective way for M&A in China.XEQ Group Co.,Ltd,evolved from Beijing Xiangeqing Co.,Itd,focuses its businesses on high-end dining and environmental protection.XEQ started a series of M&A from 2012 and received continuously decreased income as consequence.The ROE even turned negative.This phenomenon is a result of the continuous M&A.This article aims to find out the reason why XEQ's profit decreased after its M&A.The first chapter of this article is a summary of researches on continuous M&A within both domestic and overseas.It is a bedding of case analysis below.The second chapter analyzes the background of XEQ and the current situation of catering industry and environmental protection industry,as well as introducing the process of XEQ's continuous M&A.The third chapter describes the motivation of the continuous M&A combining changes of external environment of China and changes of XEQ's strategic.DuPont method and sequential substitution are used to analyze aggregative indicators of XEQ and find out the reasons of the continuously decrease of its profit.The reasons include the over hastiness M&A,shortage of capital,self-assertiveness of managers and imperfect of corporate internal governance.The fourth chapter suggests some enlightenment on the foundation of former analyses.For XEQ,it should envisage its transformation strategy and value internal governance.On that basis,it should achieve effective internal control system and avoid any sole majority shareholders.For the whole industry,enterprises should not give up catering market easily.They could enlarge their business abroad by changing business model and combine traditional operation model with internet.