Research On The Motivation And Performance Evaluation Of Horizontal Mergers And Acquisitions Of Real Estate Companies

M&A is an important way for real estate enterprises to allocate internal and external resources and enhance their competitiveness in the market,it is also an effective strategic means for real estate enterprises to rapidly expand their scale,enhance their status,and establish their corporate brand advantages.In recent years,with the rapid development of China's economy,M&A activities with distinctive characteristics of modern economic behavior have increased substantially in terms of transaction volume and transaction amount.As one of the pillar industries of the national economy,the M&A activities of real estate enterprises are more active,the transaction number increased from 20 in 2009 to 268 in 2018,and the transaction amount increased from 20.8 billion yuan in 2009 to 157.6 billion yuan in 2018.In terms of M&A types,due to the continuous macro-control of the state and fluctuations in the industry cycle,horizontal mergers and acquisitions for the purpose of acquiring land resources and industry integration have become the main types of M&A activities of real estate enterprises.The number of transactions and the transaction amount all dominate,and the performance is large.Medium-sized real estate enterprises continue to acquire small real estate enterprises to expand market power,increase market concentration,obtain monopoly profits,and seek “snow-ball” growth.The article selects “SunGo Real Estate” as the research case for this company regards horizontal mergers and acquisitions as the main expansion mode.The article sorts out the typical M&A events of SunGo Real Estate that occurred between 2011 and 2017,and summarized the representative drivers of horizontal mergers and acquisitions under the background of more tightening of national macro-control and increasing industry concentration that exist in medium-sized real estate enterprises like SunGo Real Estate;At the same time,the event research method is used to evaluate the short-term performance of SunGo Real Estate mergers and acquisitions,and the financial indicators analysis method is used for individual items.The operational capability is evaluated for long-term performance,and the overall operational performance of SunGo Real Estate is evaluated in conjunction with factor analysis.The research results show that through horizontal mergers and acquisitions,SunGo Real Estate has realized its strategic layout and improved the market position and market scale of SunGo Real Estate;however,the scale and frequency of horizontal mergers and acquisitions are not larger and higher,which is more conducive to the development of enterprises.On the contrary,large-scale and continuous M&A activities will increase the operational risks of enterprises and reduce their profitability and operational capabilities.At the end of the article,based on the case of SunGo Real Estate,the paper gives specific suggestions on how to improve the M&A performance of medium-sized and large-scale real estate enterprises through horizontal mergers and acquisitions.At the same time,it also deeply analyzes the shortcomings of the article research and gives prospects for future research directions.