Analysis On The Synergy Effect Of M&A

Mergers and acquisitions are an important means for enterprises to achieve capital expansion.Mixed mergers and acquisitions between enterprises in different industries can not only rapidly increase market share,but also enhance their control over risks.With the further deepening of China's capital market reform,the market is becoming more and more open,and the competition between enterprises is becoming more intense.More companies choose to expand their operations through mergers and acquisitions,re-allocate quality resources and enhance their core competitiveness.It is especially important to analyze whether the synergy effect of M&A expectations is met,which can help companies pay reasonable considerations and avoid typical risks in mergers and acquisitions.Based on the relevant research and theory,this paper studies the synergy effect of M&A by taking the case of China Ping An Group's acquisition of Shenzhen Development Bank.Firstly,a brief introduction is made to the development history and current situation of the companies involved in the merger and acquisition,in order to analyze the motives generated by the merger,including the promotion of the external environment and internal factors.Secondly,it sorts out the four stages of the implementation of the entire M&A transaction and elaborates the integration activities after the merger.Then,the financial data of Ping An Group and Shenzhen Development Bank for 2007-2017 were collected and compiled.After the calculation was completed,the trend of the relevant indicators in the eleven years before and after the merger was presented graphically.Through the key evaluation indicators such as customer migration,business gross profit margin and capital adequacy ratio,the quantitative analysis of management synergy,management synergy and financial synergy generated by mergers and acquisitions is carried out.Through analysis,the paper finds that the two companies have obvious synergistic effects.The merger is considered successful.The specific conclusions are as follows:(1)The financial indicators in the pre-M&A period fluctuate greatly,the profitability in each year is unstable,and the medium-term synergy effect of M&A Not obvious.(2)In the late stage of integration,synergies are emerging,and the long-term synergy is more obvious,achieving the expected effect of mergers and acquisitions.(3)Mergers and acquisitions produce better financial synergies and management synergies,while the growth potential of the two companies is relatively weak.Finally,combined with the M&A cases and related conclusions of this paper,three inspirations for the future development of China's financial enterprise mergers and acquisitions are proposed.