Research On The Motivation And Performance Of Everbright Securities Acquiring Sun Hung Kai Financial Limited

As China's capital market continues to stay open to the outside world and the degree of internationalization of the renminbi has steadily increased,domestic policies have encouraged securities companies to go abroad and join the wave of economic globalization.In order to serve the foreign investment and financing needs of Chinese enterprises and enhance their own competitiveness,domestic securities companies are also actively involved in the cause of external expansion.In recent years,the most popular method of external expansion pursued by domestic financial institutions is cross-border M&A.As one of the international financial centers,Hong Kong's highly mature securities market plays a pivotal role in the Asia Pacific region.With the introduction of Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect,the economic exchanges between the mainland and Hong Kong have become increasingly close.Therefore,Chinese brokers often set Hong Kong as their starting point to develop their global business.Many domestic securities companies plan to achieve a leap-forward development of their overseas businesses by acquiring local brokers in Hong Kong.So how to carry out cross-border mergers and acquisitions to maximize their own interests is the most concerned issue of these securities companies.Everbright Securities' acquisition of Hong Kong Sun Hung Kai Financial is a very representative case in recent years.Through this move,Everbright Securities has won one of the largest foreign investment and financing platform for Chinese brokers in Hong Kong.Studying such a case of great success can provide instructive advice and inspiration for cross-border mergers and acquisitions by other securities firms.This paper first analyzes the motivation,long-term and short-term performance of the M&A case,and the risks in M&A.It is found that the motivation of cross-border M&A of Everbright Securities is mainly in line with the trend of external expansion of the industry,the requirements of the company's strategic development plan and seeking synergistic effect arising from M&A;through the analysis of event study,it is found that in the short term,M&A has enhanced the market value of Everbright Securities.Through the analysis of financial indicators combined with qualitative analysis,it is found that the acquisition of Sun Hung Kai Finance in the medium and long term has brought the double improvement of financial performance and market performance to Everbright Securities;then analyzse the risk factors that have a negative impact on the M&A performance in this case,which mainly includes valuation risk,cultural integration risk and financial risk.Finally,based on the experience and lessons learned from the above analysis,this paper puts forward some suggestions for improving the performance of cross-border M&A.First,strategic guidance should be done before M&As.Second,companies that choose to be acquired should be carefully selected.Third,focus on integration activities after M&A.