Long-term Performance Analysis Of Overseas Mergers And Acquisitions In China's Machinery Industry

With the acceleration of economic globalization and the implementation of"going out" strategy,more and more Chinese enterprises take cross-border M&A as the new strategy to enlarge foreign direct investment,explore the international market,and improve the competitiveness of enterprise.In recent years,with the rapid development of China’s construction machinery industry,some leading enterprises have their eyes on the international market and carry out cross-border M&A activities.However,in many studies,it has shown that the risk of M&A is great,especially in cross-border M&A and overseas M&A.Therefore,based on the theory of transnational M&A and combined with the practice of transnational M&A of Chinese construction machinery enterprises,it has important significance to deeply study the problems of cross-border M&A of Chinese construction machinery enterprises and the impact of cross-border M&A on enterprise performance.Through the case study of Liugong group acquiring HSW,this paper analyze its acquisition environment,motivation,process,etc,top priority of the analysis is the master company,Liugong group’s performance changes before and after the acquisition,the evaluation of M&A performance includes financial analysis and EVA analysis,and compared the data of Liugong Group with those of Shantui and Sanyi Heavy Industry to further explain the relationship between the change of the performance and the M&A activity.Then came to the conclusion that the overseas M&A to some extent promoted the improvement of Liugong group business performance,but this effect is small,and not enough to withstand the negative effects of the economic downturn.The overseas mergers and acquisitions of Chinese machinery companies from 2012 to 2015 were selected as research samples,and the overseas-based mergers and acquisitions performance of Chinese companies was empirically analyzed using the Buy-and-Hold Abnormal Return method.Then,using BHAR as the explanatory variable,the multi-section regression analysis method is used to analyze the influencing factors affecting M&A performance,and to study the influencing factors of overseas M&A performance.It was subsequently concluded that Chinese corporate shareholders as a whole had a significantly negative continuous holding extraordinary income(BHAR)from overseas mergers and acquisitions,which indicates that Chinese corporate shareholders have caused significant wealth losses from overseas mergers and acquisitions in the long run;cultural differences and China There is a positive correlation between corporate overseas M&A performance.The greater the cultural difference from the host country where the target company is located,the higher the M&A performance.