Case Study Of QuMei Home Furnishings’ Acquisition Of Ekornes

At present,the government has issued a series of policies to encourage enterprises to conduct global layout through cross-border mergers and acquisitions.At the same time,some high-quality overseas companies have advanced technology and management experience,and a good brand image.Therefore,the pressure for domestic industrial upgrading is gradually increasing.Many companies use multinational mergers and acquisitions to improve product quality,brand image,and explore overseas markets.Among them,M & A leverages small and large companies.One example is Qu Mei Home Furnishings’ acquisition of Ekornes.Nordic Furniture is favored by Chinese consumers who are pursuing consumption upgrades for its sophisticated manufacturing.On May 24,2018,Qu Mei Home Furnishings announced that it would acquire Norwegian listed company Ekornes for a consideration of RMB 3.677 billion.At that time,the market value of Qu Mei Home Furnishings was only 6.521 billion yuan.The merger was a cross-border leveraged M & A.Qu Mei Home Furnishings also made a lot of loans to achieve mergers and acquisitions.Qu Mei Home Furnishings is a light industrial manufacturing industry controlled by the family.It is a typical private enterprise from the perspective of its industry and equity structure.This article mainly studies the motivation,risks,and performance of Qu Mei Home Furnishings’ acquisition of Ekornes.It aims to provide Qu Mei Home Furnishings with development strategies and provide reference for similar multinational leveraged mergers and acquisitions.This article analyzes the motivations,risks,and performance of this merger and acquisition based on the related theories,motivations,risks,and performance of corporate mergers and acquisitions.The results of the study show that the drivers of the merger include the pursuit of synergies between brands,technologies,and supply chains,the development of overseas markets,and the pursuit of the interests of major shareholders.There are pricing risks,debt risks,and integration risks in mergers and acquisitions.The current method of valuation of Ekornes was compared with the market method valuation used in this transaction,and it was found that there was a problem of over-pricing in this transaction.The short-term stock price before and after the M & A announcement was issued using the event analysis method The research on volatility has found that the market’s short-term response to the merger and acquisition is relatively negative.Compared with the sharp rise in the stock price of Ekornes after the announcement,it also proves that the market is not optimistic about the merger and acquisition.Compared with the performance of the domestic furniture manufacturing industry,it was found that the debt repayment ability and profitability and operating ability of Qu Mei Home Furnishings were significantly weakened within one year after the merger and acquisition.Some non-financial indicators were analyzed and it was found that mergers and acquisitions are expanding globally and expanding the market,patent research and development has played a certain positive role.Finally,the conclusion is that the market performance of the main merger company is negative,and the merger and acquisition result in a temporary decline in operating performance after one year.In view of the problems that have occurred after the acquisition of Qu Mei Home Furnishings,it is suggested that in terms of preventing financing risks,we should increase our own profitability and increase financing to replace some of the M & A loans.In terms of preventing integration risks,we should increase the incentives for management and employees and continue to increase investment in Ekornes China’s regional operations,improve Ekornes’ operational efficiency and adopt effective cultural integration strategies.Proposals were made for similar private enterprises in the light industrial manufacturing industry when conducting mergers and acquisitions.They should select appropriate target companies,reserve sufficient evaluation time,comprehensively use multiple evaluation methods,use multiple payment instruments,and strengthen integration.