Research On J Company's Diversified M&A Performance Evaluation

Diversified Merger and Acquisition(M&A for short)is an important way for enterprises to expand their industrial scale and achieve strategic transformation.M&A have a positive impact on corporate performance,and there are also negative impacts.Although the theoretical community is increasingly attacking diversification,there are more and more companies in the industry who are keen to implement diversified M&A.After accumulating certain resources and strengths,enterprises choose to take a diversified path and enter emerging industries.Unfortunately,enterprises have not achieved the original intention of implementing diversified M&A,bringing new profit growth points to enterprises and even increasing enterprises.The overall risk of taking up a lot of resources.Is the diversified M&A behavior “Noah's Ark” or “Pandora Box”?This paper selects J company as a case study of diversified M&A performance,and analyzes the impact of the merger on corporate performance from both financial performance and non-financial performance.Firstly,the relationship between the diversification degree of J company and its financial performance was studied through time series analysis.Secondly,12 relevant financial indicators for measuring the profitability,solvency,operational capability and growth ability of J company in 2013-2017 were selected.The impact of M&A on financial performance,while using the combined financial indicators after eliminating the J company's LED industry and microfinance industry to compare with the industry average,and finally measure the J company's diversification from the three aspects of capital market effect,risk dispersion effect and synergy effect.The impact of M&A on its non-financial performance.Using Eviews regression analysis,it is found that the degree of diversification of J company is positively correlated with the financial performance of the company.By comparing the financial indicators after the elimination with the industry average,it is found that J company's diversified M&A have brought positive effects to the company.According to the regression results,J company's diversified M&A have significantly improved the capital market effect of the company,the stock price trend is good,and the excess cumulative return rate is significantly positive.Whether in risk dispersion or synergy,this diversified merger has brought huge benefits to the company.Through a series of research results,J company's diversified M&A have enabled the company to successfully enter the emerging lithium battery industry and promote the development of the company.Through the discussion of J company's diversified M&A,this paper can provide a reference for J company's future company development and strategy formulation,and more objectively and rationally treat diversified M&A,and can be used as reference for similar enterprises to implement diversified M&A.