A Case Study On BesTV's Acquisition And Reorganization

With the development of the socialist market economy,a series of reforms in state-owned enterprises and the cultural system have been advanced.Meanwhile,the progress of information technology drives the transformation of media industry.Under this macro background,state-owned enterprises,traditional media enterprises,especially state-owned media enterprises,need to transform,so as to inject fresh vitality into their future development.In 2015,BesTV New Media Co.,Ltd.successfully completed the merger and reorganization transaction,promoted the strategic transformation of the group,and became a pioneer in the reform of state-owned cultural media enterprises.This paper systematically sorts out the relevant literatures about merger and acquisition of enterprises,and summarizes the relevant theories of synergistic effect by using the literature research method.Besides,it uses the case study method to analyse the merger and reorganization transaction of BesTV in various aspects.At last,the paper makes a comprehensive analysis of the performance of the merger and reorganization by means of event study and financial analysis.Using the above research methods,the paper makes an in-depth study on the merger and reorganization of BesTV.Firstly,it introduces the background and significance of the research,reviews relevant literatures,and briefly describes the research content and methods.Then,it introduces the basic information of the participants involved in the merger and reorganization of BesTV,focuses on the details of the three parts of the transaction,which includes the exchange of shares to absorb Oriental Pearl,the issuance of shares and the payment of cash to purchase assets,as well as the matching capital raising of 10 billion yuan,and briefly describes the financial results after the merger.According to the thinking framework," motivation--activity – post-merger integration--synergistic effect--performance improvement".the paper begins to analyse the internal and external motivations of BesTV,the managerial,operating and financial synergy of the post-merger integration,as well as the market performance and financial performance of the merger and acquisition.Finally,some enlightenments are summarized on the basis of the case study,which are aimed at state-owned media enterprise reforms and post-merger integration.Through the case study of BesTV,it can be found that the company actively carries out cultural integration,organizational integration,personnel integration,business integration and financial integration after merger and acquisition,so as to generate management synergy,operating synergy and financial synergy.In addition,on the announcement day when the board of directors make a resolution about the merger and reorganization,the stock price of the company gains positive abnormal return and the market performance is improved obviously.In terms of the financial performance,the synergistic effect of post-merger integration can indeed improve the enterprise value,and the enterprise's economic added value changes from negative to positive.The company's economic added value significantly improves within 1-2 years after the merger,but the improvement effect gradually weakens.