A Comparative Study On The Performance Of Cross-industry Mergers And Acquisitions

Mergers and acquisitions is no longer a strange event in China's Market,In M&A events,there is a special type called cross-industry M&A,through cross-industry mergers and acquisitions,enterprises can enter other industries while operating their own business,forming diversified development of enterprises,to create multiple profit points for enterprises,it can even form upstream and downstream industrial chains,improve the competitiveness and competitive advantage of enterprises.With the continuous efforts of the state to stimulate the vitality of China's economic market,In recent years,more than 1000 mergers and acquisitions have taken place in China's economic market every year.Mergers and acquisitions can not only bring good scale effect to enterprises and promote their better and longer-term development,but also benefit the effective allocation of limited resources in the market economy,which has irreplaceable significance in today's increasingly shortage of human,material and financial resources.In 2015,China has begun to implement the policy of two births in an all-round way,which is an unprecedented advantage for the preschool education industry.With the beginning of the 80 th and 90 th generations becoming parents and fathers,they have different educational concepts from the previous generations and pay special attention to children's education.In addition,the preschool education industry in China,especially private kindergartens,has been in short supply.This makes the preschool education industry become the target of various enterprises want to transform one after another.Based on this background,this paper chooses WeiChuang and ChangFang,which are both LED concept stocks transforming into kindergarten education industry,as the research objects,expecting to understand the factors that influence the success or failure of cross-industry M&A by means of comparative analysis,and launches specific research from the following aspects as the research objectives:(1)Read relevant literature and theories on mergers and acquisitions and cross-industry mergers and acquisitions,sort out and summarize these literature and theory,and do a good job of theoretical knowledge reserve for follow-up research;(2)To analyze the background of the transformation of WeiChuang and ChangFang to the kindergarten education industry,and explain their rationality as research objects;(3)Look up business announcements and collect information,then the background,process,motivation and performance of M&A are described and analyzed in detail.For M&A performance,we mainly study it from two aspects: financial performance and market reflection.Through the research,we find the specific reasons for the success or failure of the two enterprises' transformation M&A in the aspects of M&A system,M&A pricing and enterprise strategy,relevance to major business and get the relevant enlightenment from the analysis of these reasons.(4)Finally,it summarizes the possible shortcomings and limitations in the process of this study,and hopes that these conclusions can provide some reference for enterprises that want to transform through cross-industry mergers and acquisitions in the market.