Motivation And Risk Analysis Of Sunac China Mergers Wanda Cultural Tourism Project

In recent years,the real estate industry has gradually entered the silver phase from the golden phase of development.Problems such as rising land prices and rising financing costs have continuously eroded the profits of the real estate industry and reduced the profitability of real estate enterprises.In addition,with the continuous upgrading of macro-control,the living space of real estate enterprises has been continuously squeezed,the real estate industry is facing a new round of reshuffle,the integration of enterprise mergers and acquisitions has intensified,and the industry concentration has been rising.On the one hand,real estate enterprises acquire land through the acquisition curve,avoid the overheated primary market,accelerate the pace of resource competition,achieve rapid expansion of scale,and seize the market position.On the other hand,cross-industry mergers and acquisitions enable real estate enterprises to quickly enter new fields,realize diversified business development and seek new profit growth points.However,the real estate industry is a capital-intensive industry,with the characteristics of huge investment amount and slow recovery of funds,making the real estate enterprises themselves have a high asset-liability ratio and face greater financial risks.In addition,mergers and acquisitions of real estate enterprises usually involve huge amounts of money.Although mergers and acquisitions can bring benefits to real estate enterprises,they also increase the financial risks faced by real estate enterprises.Especially in cross-industry mergers and acquisitions,real estate enterprises are faced with various risks such as industry,market competition,finance and integration.In addition,the introduction of new rules on asset management has greatly limited the financing channels of real estate enterprises and sharply increased their risks.Focusing on the motivations and risks of real estate mergers and acquisitions will be conducive to the rapid development of real estate enterprises under the background of the current transformation of China's real estate industry.Sunac China,as a typical representative,has achieved rapid expansion in scale and diversified business through mergers and acquisitions in recent years,with frequent number of mergers and acquisitions and huge amounts of mergers and acquisitions,which is very representative.Therefore,this paper chooses Sunac China's acquisition of Wanda culture & tourism project as a case study to analyze the motivation and main risks,analyze the causes of the risks,and put forward suggestions on the prevention of the acquisition risks of real estate enterprises,so as to provide enlightenment and reference for the acquisition of real estate enterprises in China.Through analysis,it can be concluded that the main motivations for Sunac are :(1)Acquisition of land by curve,acquisition of low-priced land resources;(2)Expand the scale and accelerate the national strategic layout;(3)Initially explore the road of diversified development;(4)Obtain the expected financial earnings.The main motivations of Wanda Commerce are :(1)Tighter regulation and the need to ease financial strain;(2)The urgency of returning to a-shares;(3)Reservation of management right.The main risks in M&A are: real estate industry risk,market competition risk,financial risk and integration risk,among which financial risk is the most important risk.The main reasons for the risks are as follows :(1)The business is too concentrated,and the industry risks are large;(2)The overheating of cultural and tourism industry leads to huge risks of competition;(3)Frequent mergers and acquisitions,large capital occupation,a large amount of debt is about to mature;(4)Tighter supervision and limited financing of housing enterprises;(5)Cross-industry operation is difficult.Based on the case study of Sunac China's acquisition of Wanda culture & tourism project,this paper proposes the following risk prevention measures:(1)Select reasonable targets to avoid blind mergers and acquisitions;(2)Accelerate diversification transformation and prevent industry risks;(3)Broaden financing channels and adjust capital structure;(4)Strengthen post-merger integration.