Research On The Influencing Factors And Effects Of M&A Premiums In Information Technology Companies

With the implementation of major strategies such as “Made in China 2025” and “Internet Plus”,the information technology industry has stepped into an age of rapid development.At the same time,information technology products are popularized and technological innovation capabilities are upgraded.Effective M&A within the industry can quickly expand company’s product lines and customer bases,and motivate rapid expansion.It can be foreseen that the information technology industry will enter a new stage of high-speed integration.Enterprises will seek integration opportunities from various aspects of the industry chain,and promote the M&A boom.With the new wave of M&A in the information technology industry,M&A premiums are common.At present,scholars pay more attention to the factors that affect M&A premiums rather than to use case analysis methods to study effects of M&A premiums combined with the factors.Therefore,this article analyzes the emergence and effects of M&A premiums through the case of Donghua Software’s acquisition of Zhigao Communication and provides a new perspective for the research of M&A premiums.Taking the case of M&A in the information technology industry as an example,this article first introduced the basic background of M&A cases and then analyzed the causes of the M&A premiums from four perspectives of industry characteristics,assets assessment,payment methods,and synergy effects.The effect of the merger after the premium merger was explained in terms of short-term market response,synergies,operating results,and achievement completion.Based on above analysis,the conclusion of this paper is that: the expectations,the premiums and effects of the M&A transaction between Donghua Software and Zhigao Communication were not consistent,and the M&A did not bring economic benefits to Donghua Software.According to the problems existed in the case,this article gave the following proposals: From the business perspective,enterprises should reasonably select the target companies to meet their own development needs when implementing M&A strategies;enterprises should rationally expect market prospects when assessing target companies,and carefully determine premium rates;the integration of company cultures,resources,and management should be strengthened after the M&A.From the perspective of supervision,the China Securities Regulatory Commission should further improve the information disclosure rules for M&A;regulators should strengthen the supervision of share payment transactions.