Performance Evaluation Of Transnational Mergers And Acquisitions Of Hotel Enterprises

With the development of the Chinese economy,the upgrading of domestic industries and the encouragement of the Chinese "Go globally" strategy,Chinese enterprises began to change their business strategies and participated in international competition by conducting transnational M&A.In recent years,the reason why the pace of transnational M&A conducted by Chinese hotel enterprises has accelerated is that the profitability of hotel industry in China has dropped and the development of outbound market has accelerated.On the one hand,enterprises can acquire overseas high quality assets quickly by conducting transnational M&A.On the other hand,they can achieve economies of scale and obtain synergy effects.However,the number and amount of transnational M&A conducted by Chinese enterprises have increased rapidly in recent years,but there are still few successful cases.We can see that it is uncertain that whether transnational M&A can increase the value of enterprises.Therefore,how to improve the success rate of transnational M&A of Chinese enterprises,especially hotel enterprises,is the main focus of this paper.This paper takes Jinjiang group transnational M&A of Louvre group as an example,this case was paid full in cash and it is a comparatively successful transnational M&A case in domestic hotel industry.Firstly,this paper combing the literature review and explain the theoritical background,then evaluates the short-term M&A performance and long-term M&A performance of this transnational M&A case from the perspective of market and financial statements through event study method and economic value-added method respectively.Overall,it is believed that this case has increased value for Jinjiang group.By summing up the factors affecting the performance of transnational M&A in the early and later stage of M&A,it is conclude that correct attitude of buyers will help win the bid;it is of great importance for transnational M&A cases,especially for those involving large cash payment,to make financing arrangment reasonablely and choose good time;the support of national macro-policy,the consistency of business strategic of both sides and development of detailed integration plans in advance will help to obtain synergy effects.The main contribution of this paper is that it supplyments the case study of transnational M&A of hotel enterprises in China;it summarizes the factors affecting the performance of transnational M&A of hotel enterprises and supplymens current research theory;it has typical reference for Chinses hotel enterprises to conduct transnational M&A in the future owing to Jinjiang group lacking of business experience in Europe.