Performance Analysis Of COFCO's M&A Tully Sugar

M&A is a development model in which companies achieve their own development by acquiring other companies.Through this model,companies need to achieve their specific goals,strategic needs,access to overseas resources,or market development needs.As the largest “food merchant” in China,COFCO has great influence in the domestic agricultural product market,but there are still many shortcomings in the international agricultural product market compared with the traditional four major grain merchants.In order to better develop and further strengthen its influence in the international market,COFCO is actively promoting its “Full Industry Chain” strategy and “going out” strategy for its future better development,and has successively invested in Singapore.Foreign companies such as Noble Agriculture,Dutch Nidra Company,and Australian Tali Sugar Industry strive to become China's international grain producers.This paper takes COSCO Sugar's acquisition of Tali Sugar as the research object.The research focus is on the level of cross-border M&A performance.From the perspective of market performance and financial performance,the relevant data indicators before and after COFCO's M&A are compared.Analysis and evaluation of whether this merger has brought positive benefits to the COFCO Sugar Industry,and whether the benefits are significant.Finally,based on the results of market and financial performance analysis,combined with the full text to draw conclusions and related recommendations to improve performance.On the whole,this paper is divided into six parts.Like most papers,this paper also introduces the introduction as the beginning part of the article.It is responsible for introducing the background,significance and ideas of this paper.The second part is the combing and introduction of the relevant theories of cross-border mergers and acquisitions,as the theoretical basis of this article.The third part is the background,motivation and merger review of mergers and acquisitions,and strive to restore the whole process of COFCO's acquisition of Tali Sugar.The fourth and fifth parts are the market performance and financial performance analysis of COFCO's acquisition of Tali Sugar.The sixth part is the conclusion of the full text and related suggestions for improving performance.M&A performance has always been the focus and hot issue of cross-border M&A research.To study the performance of cross-border M&A needs to choose the appropriate method to get relatively correct results.This paper uses the research methods commonly used to evaluate M&A performance,namely market performance method and financial performance method..The market performance method is to investigate the change of stock returns before and after the M&A event through the event research method.Generally,the difference between the actual return of the stock during the event period and the estimated return of the stock in the absence of the event is calculated.The excess return rate and the cumulative excess return rate are evaluated to evaluate the company's cross-border M&A performance.From the results of the analysis,during the selected event period,the frequency and magnitude of the positive excess return rate are higher than the negative value,and the cumulative excess return rate has been positive and the overall trend is rising,so the acquisition is in stock.The market has indeed brought excess returns to the COFCO Sugar Industry.Market investors are optimistic about the acquisition of Tali Sugar by COFCO Sugar.The market performance benefit of this M&A is positive and significant.In order to more intuitively examine the performance of market performance,this paper adds a comparative analysis of the weekly cycle growth of COFCO and the Shanghai Composite Index.The results show that investors are not optimistic about this event in the medium and long term,and the bearers are mostly.At the level of financial performance,the accounting indicators method is usually used to analyze the financial performance of cross-border M&A,and the financial performance changes before and after cross-border M&A are analyzed from the four aspects of profit,debt repayment,growth and operation.In order to understand the changes in financial performance more comprehensively,this paper uses Du Pont analysis as a supplement on the basis of the accounting indicator method.The Du Pont analysis method is based on the index of ROE.The factorization method is used to analyze the financial status of the company in terms of profit,operation and solvency.The financial performance analysis of this paper is based on the combination of Du Pont analysis method and accounting index method.Du Pont research results show that COFCO's acquisition of Tali Sugar has not improved the profitability of COFCO,and its operational capacity has a certain degree.Improvement,solvency is uncertain;theanalysis results of the accounting index method are similar to the results of Du Pont analysis.From the comprehensive results of the two analytical methods,after the merger and acquisition integration,the profitability and development capacity of COFCO Sugar has not been greatly improved due to mergers and acquisitions,the effect is not significant,the solvency is uncertain,and the operational capacity is to a certain extent.Upgrade.The research in this paper shows that this cross-border M&A has achieved the expected goals of COFCO's “full industry chain” and “going out” strategy and the transformation of COFCO's sugar business;the market performance of this M&A is positive and significant,but only short-term effects;In terms of financial performance,the operating capacity of COFCO Sugar has increased after the merger,but the profitability and development capacity have not been substantially improved,and the solvency is uncertain.COFCO Sugar Industry should strengthen cost control and mergers and acquisitions to enhance M&A performance and maximize the effects of M&A.