Study On The Motives And Performance Of The Industrial Chain M&A In The LED Industry

With the slowdown of economic growth in China,manufacturing enterprises have also entered a new period of transformation and upgrading.As a manufacturing industry,the LED industry is facing problems such as overcapacity and fierce competition.In this context,the industrial chain mergers and acquisitions(M&A)have become an important means for LED companies to integrate resources and expand markets.As a leading company in LED midstream,MLS actively seeks to explore overseas markets.In 2017,it acquired LANDVANCE,a subsidiary of OSRAM,to make up for its shortcomings and improve its own industrial chain.This paper selects MLS's acquisition of LAND VANCE as a case to study.First,from the perspective of the LED industry's development,this paper analyzes the emergence and development of the LED industry,and further analyzes the industrial chain' s structure of the LED industry,summarizes the motives of the M&A of the industrial chain,and derive the performance impact from the external environment and the motives of the merger and acquisition of LED companies.The impact path provides a logical framework for case analysis.Then,this paper analyzes this case from three aspects:the background,the strategy and the motives of MLS's acquisition of LAND VANCE.Finally,this paper analyzes the short-term and long-term performance of MLS after the merger,tests the market reaction and financial impact of the merger,and draws the conclusion of the motives and performance of MLS's acquisition of LANDVANCE and puts forward suggestions accordingly.This paper finds that the motives of MLS's industrial chain M&A can be summarized as strategic motives and economic motives.Strategic motives includes building an industrial chain,strengthening brand channel construction,improving core competitiveness,and opening up the international sales market.Economic motives includes achieving scale effects,obtaining coordinate development and reduce transaction costs.In terms of the performance of MLS's industrial chain M&A,from the perspective of short-term performance,the market reaction fluctuates greatly,and this M&A has brought certain benefits.From the perspective of long-term performance,this paper finds that the financial performance of the merger varies.MLS's profitability has not been greatly improved in the short term,but it has the potential to improve in the long term.After the M&A,MLS's growth capacity,operational capacity has been improved to a certain extent.In addition,MLS's performance in cash creation and solvency is poor after M&A.In general,MLS's acquisition of LAND VANCE has expanded the scale of the enterprise,enriched the product categories,and strengthened its competitiveness.With the deepening of integration and the constant play of synergies,profitability is expected to be improved.