Study On The Motivation And Effect Of Cross-Border Merger And Acquisition Of Longwen Co. In Kingsun Co.

In recent 10 years,under the background of deepening supply-side structural reform,domestic and foreign market competition has become more intense,and many traditional enterprises are suffering more and more impacts from rising raw material prices and falling product prices.Many traditional enterprises begin to set their sights on emerging industries,aiming to find new profit growth points or seek strategic transformation of enterprises.In the case selected in this paper,before the merger,the company Kingsun optoelectronics co.,ltd.was a traditional semiconductor lighting industry.Facing the dilemma of intensified competition in the industry and poor performance of the company,it chose to enter the education and training industry through cross-border merger as the way to break through the limitations of the traditional industry.Longwen education Co.,ltd.is a typical case of extending the main business of a traditional enterprise to an emerging industry.This paper starts with the macro-economic background and the situation of both sides of the merger and acquisition to clarify the background and significance of the paper research;Then it summarizes the specific content of the merger plan and the remarkable characteristics of high performance commitment and high premium,and then analyzes the motivation of the cross-border merger initiated by Kingsun shares from the four aspects of the enterprise's need for new profit growth point,the suppression of stock price decline,the pursuit of synergies and the pursuit of strategic transformation.The core part of this paper makes a vertical comparison and evaluation on the effect of merger and acquisition,and finds that most of the expectations of merger and acquisition are not met,such as the performance continues to decline,the stock price continues to fall,the synergy effect of merger and acquisition is poor,and the transformation is not achieved successfully.On the basis of effect evaluation,this paper analyzes and summarizes the problems and problems existing in the m&a activities before,during and after the m&a,including:high valuation of m&a,excessive speculation in unrelated industries,weak integration after the m&a,unclear development direction of enterprises,etc.To solvethese problems,study in detail the various aspects of m&a and find out the reason of the m&a effect is not equal to idea,and then at the end of the article to the existence of these problems put forward the corresponding Suggestions and countermeasures for reference,such as reasonable valuation of target,attaches great importance to the coordination effect of cross-border mergers and acquisitions,strengthen the integration after m&a and reasonable planning and strategic transformation;At last,the conclusion of this paper is put forward.Through the study of this case,the author finds that although it is a good way for traditional enterprises to enter the emerging industries through cross-border mergers and acquisitions,the integration after mergers and acquisitions is difficult due to the lack of industry relevance,and the effect of mergers and acquisitions may not be as expected.The case of longwen Co.,ltd.can provide reference experience and lessons for other enterprises in similar mergers and acquisitions.