| At present,China’s economic development has entered a period of stabilization,the traditional industries have been neglected.A large number of traditional enterprises have difficulties in operation,and the urgent need to seek transformation.The current capital market M&A’s activities have maintained a hot trend in recent years,which has become a new way to increase performance for traditional enterprises by cross-industry M&A.And there are certain risks and huge benefits in the process of cross-industry M&A transformation and upgrading.Therefore,the problems and disputes of cross-industry M&A of traditional enterprises with the background of the current transformation have always existed,and the concern about the performance changes before and after cross-industry M&A and the discussion has never stopped.Based on the current situation of China’s M&A market’s development and the overall situation of cross-industry M&A market,this paper introduces the characteristics of traditional enterprises in the cross-industry M&A market under the background of transition,and analyzed the characteristics of traditional enterprises in cross-industry M&A in the selection of targets when a traditional Chinese enterprises in cross-industry M&A,performance settings,strategy planning aspects and features of trading.In order to make a better research,this paper selects the typical enterprise BaiHuaCun cross-industry M&A’s case with typical characteristics.Before the M&A BaiHuaCun belonged to the traditional coal industry.The problems of overcapacity and fierce competition made BaiHuaCun difficult to operate.The demand about transformation was urgent.After the acquisition of HuaWei Medicine,it successfully entered the pharmaceutical industry and realized industrial transformation and upgrading.Based on the cross-industry M&A motives and M&A transaction methods of BaiHuaCun,this paper evaluates the cross-industry M&A performance of BaiHuaCun’s acquisition of HuaWei Medicine from both financial performance and non-fimancial performance,and analyzes its short-term wealth effect through event research method.Combined with the Balanced Score Card、EVA ancd performance commitments,systematically analyze the cross-industry M&A performance.This paper draws the conclusion that cross-industry M&A of traditional enterprises can achieve the purpose of transformation,but cross-industry M&A brings only the improvement of short-term business performance,which is difficult to sustain after the study of the case.By analyzing the case of BaiHuaCun,it’s found that there are uncertainties in the business performance of M&As in the process of M&A,A high premium M&A bring huge goodwill impairment,and the performance promise of M&A is too high,only paying attention to short-term’s performance growth,the post-merger synergy effect did not play well,and other issues,and raised suggestions on issues ranging from careful selection of merger targets,strengthening the management of mergers and acquisitions premiums,signing reasonable performance commitment clauses,and paying attention to long-term performance goals. |
