The Motivation And Performance Analysis Of Forest Lighting's "Snake Swallows Elephant" Cross-border M&A

On July 15,2016,Forest Lighting suspended trading and issued an announcement to take advantage of the M&A fund to carry out "Snake Swallows Elephant" Cross-border M&A against LEDVANCE.In March 2017,Forest Lighting took over LEDVANCE at a total transaction price of $4 billion.By the beginning of 2018,the acquired party had completed the industrial and commercial changes,and LEDVANCE officially became a subsidiary of 100% holding by Forest Lighting.This paper takes the case of "Snake Swallows Elephant" Cross-border M&A against LEDVANCE by Forest Lighting as the research object.First of all,this paper introduces Forest Lighting cross-border M&A program.Secondly,on the basis of literature review and theoretical basis,the paper analyzes its M&A motivation.Furthermore,the event study method and the financial index analysis method are used to evaluate the M&A performance.Then,I deeply analyze the successful path of the merger from the merger stage and the integration stage.Finally,I conclude the experience and revelation of successful implementation of the cross-border M&A.The research results are as follows: the successful implementation of "Snake Swallows Elephant" M&A by Forest Lighting,is because of its reasonable M&A scheme and proper M&A integration.During the period,Forest Lighting skillfully used the M&A fund to implement the "Snake Swallows Elephant" Cross-border M&A,overcame the financial or operational management limitations of cross-border M&A,and reduced the financial and legal risks of cross-border M&A investment.Meanwhile,Forest Lighting chose LEDVANCE as the object of M&A,fully considering the exertion of synergy effect.In the integration stage,Forest Lighting used the sales channel of LEDVANCE,to create the market segmentation of European and American filament bulb,leveraging strengths from the-hundred-year brands,like,OSRAM and SYLVANIA,to enhance the brand influence,improve technologies,and build supply chain center,implement management streamlining,conduct all-round integration including brand,sales channels,supply chain,personnel and so on,in order to achieve synergy,play the value of M&A.As for the enlightenment from this article,the case of "Snake Swallows Elephant" Cross-border M&A against LEDVANCE by Forest Lighting,has the far-reaching influence for the private enterprises,in which,the ingenious and reasonable M&A plan not only can provide the reference to the domestic private enterprises,but also each conformity measure after the M&A also is worth other enterprises to learn.