The Value Creation Analysis On The High Premium Merger And Acquisition Of Perfect World Picture And Perfect World Network

With the rapid development of China’s economy and the increasingly fierce competition among enterprises,there are more and more listed companies choose to enhance their comprehensive strength through mergers and acquisitions.This phenomenon becomes more and more common in the capital market of China.As an important form of mergers and acquisitions,the merger and acquisition with premium is becoming more frequent in recent years.The average premium rate of listed companies which have disclosed premium data in Shanghai and Shenzhen stock markets is also increasing year by year.In the actual activities,some listed companies can improve their profitability and create enterprise value through the merger and acquisition with premium.In fact,the fundamental purpose of merger and acquisition with premium for listed companies is to create enterprise value.Therefore,it is of great practical significance to study whether the merger and acquisition with premium could create value for listed companies or not and how to realize value creation.This thesis adopts the method of single case study to select the case of Perfect World Picture,which is the typical event of high premium merger and acquisition in recent years and its premium rate is as high as 412 times,as the research object.This thesis introduces the basic condition of the case and analyzes the short-term and long-term value effect of the case of Perfect World Picture by means of event study and economic value added(hereinafter referred to as EVA)evaluation.Furthermore,this thesis analyzes that how the enterprise could realize value creation after the merger and acquisition from the aspects of off-balance sheet assets coordination,business expansion in the industrial chain,domestic and foreign market layout and enterprise risk reduction.The results of the study are listed as follows.Firstly,as for the value creation effects,the high premium merger and acquisition have not only increased the wealth of short-term shareholders of the enterprise,but also improved the EVA and the return rate of EVA greatly.That is to say,the high premium merger and acquisition have enhanced the short-term and long-term value for the enterprise and the value creation due to the high premium merger and acquisition has been realized.Secondly,as for the value creation mechanism,the analysis shows that the synergy of the high-value-added and off-balance-sheet assets of cultural enterprises have enhanced the expectations of investors and thus enhances the wealth effect of short-term shareholders.The horizontal merger on industrial chain,domestic and foreign market development and diversified business development have effectively promoted the profit creation efficiency,capital operation efficiency and risk resistance ability of the enterprise.They have become the main driving factors of long-term value creation of Perfect World Picture.Therefore,the listed companies may create enterprise value through the merger and acquisition with premium and the realization of enterprise value creation is the result of the interaction of many factors.According to this thesis,light-asset enterprises such as cultural enterprises tend to generate high premium in merger and acquisition activities due to their high value-added off-balance sheet assets.In high premium merger and acquisition activities,making reasonable decision and transaction plan is the basis of enterprises value creation.Paying attention to the integration of resources and the implementation of strategic planning after the high premium merger and acquisition is the important condition to create value for the listed companies.