A Case Study On Midea Group M&A Toshiba Lifestyle Products & Services Corporation

In the market economy environment,M&A is the important means for enterprises to expand the scale and enhance the competitiveness.In recent years,the number of M&A in China and the amount of M&A continued to grow,in 2015,China's M&A transactions have 6485 cases,reached an increase of 57.86%;M&A amounted to 302.812 billion US dollars,reached an increase of 16.62%.With the gradual integration of the global economy,crossborder M&A as a major way of foreign direct investment in the world has been expanding trend.After China's accession to the WTO,cross-border M&A has become the main way for China's enterprises to be more international,but whether the cross-border M&A will increase the value of enterprises,there is no unified conclusion.As the widely-concerned M&A case in 2016,the Midea Group cross-border M&A of Toshiba Lifestyle Products & Services Corporation has come to an end,but the Midea Group is out of what motivation,after the acquisition whether the cross-border M&A will increase the value of enterprises,we need to find out.Therefore,based on the study results of scholars at home and abroad,this paper chooses the case of Midea Group's M&A of Toshiba Lifestyle Products & Services Corporation to analyze the value creation of Midea Group.Firstly,in the case introduction section,this paper introduces the white electric industry background,the Midea Group and the Toshiba Lifestyle Products & Services Corporation,and then introduces the transaction of this M&A event.Then,in the case analysis section,this paper analyzes the motivations of Midea Group's M&A of Toshiba Lifestyle Products & Services Corporation,and on this basis,summed up the value creation activities of M&A,the synergies generated after M&A,and the value of M&A.Through the analysis of this case,it is found that Midea Group has the following main motivations for the acquisition of Toshiba Lifestyle Products & Services Corporation: to complete the core strategy of the Group,to improve the brand image of Midea Group,to expand the aboard market,to acquire the resources of technology and talents.Midea Group has carried out a series of value creation activities in this M&A: sufficient pre-acquisition preparation,reasonable transaction process and effective M&A integration.After the M&A,this event results in a series of synergies,including: managing synergies,operating synergies,financing synergies and intangible assets synergies.Through the event research method,the Tobin Q value method and the financial index method analysis,we can see the M&A has succeed in creating value.Finally,based the above case analysis,this paper obtains the following inspiration: for Midea Group,due diligence investigation is the prerequisite for the success of M&A,evaluation the target company is the basis of the value creation of M&A,the effective M&A integration is the necessary condition for the enterprise to create the value and the synergistic effect is the only way to create the value;for China's white manufacturing enterprises,they need to make full use of M&A to strengthen their own strength,and technical resources is the key to maintaining the leading position in the enterprise.