Study On Performance Of The Cross-industry M&A Between Nanxing Machinery Co.,Ltd. And Unique Network Technology Limited

With the continuous transformation and development of economy,the improvement of science and technology and the improvement of living standards,now traditional manufacturing enterprises are facing more fierce competition.The homogenization and isomorphism of product is a serious problem.The deviation between consumer demand and supply chain eventually leads to overcapacity,even the crisis of capital chain,which make it difficult to improve performance.Many enterprises hope to improve their resource allocation and utilization efficiency through cross-industry M&A,which can help them to transform and upgrade.Therefore,this paper analyzes the typical case of cross-industry M&A,which can provide reference for traditional manufacturing enterprises that need transform and develop.This paper takes the cross-industry M&A between Nanxing Machinery Co.,Ltd.and Unique Network Technology Limited as the case study object.Taking the background,motivation and process of M&A as the starting point,this paper makes the performance assessment of Nanxing from both the short-term and long-term views.Firstly,when analyzing short-term performance,this paper uses the event study method.Secondly,when analyzing long-term performance,this paper uses Financial Analysis,DEA evaluation and Social Performance Assessment.At the same time,this paper also analyzes the synergy effect after M&A to evaluate the performance comprehensively.Finally,this paper explores the transmission path of performance improvement in M&A,which makes the whole article more rigorous.Through case study,this paper finds that:(1)the acquisition has a positive impact on the share price of Nanxing in the short term,and then the stock performance becomes more stable as investors become calmer;(2)the long-term financial performance of Nanxing after the acquisition is relatively stable as a whole,and the use efficiency of funds begins to improve,and the risk faced by the company has declined.The dual main business model has promoted the development of IDC business,and Nanxing has a good sense of social responsibility.But the company should pay attention to the decline of returns to scale,and the staff and culture need time to integrate after M&A.The company also needs to strengthen the management and monitoring of accounts receivable to avoid bad debts.On the whole,this M&A is relatively successful in terms of performance commitment,motivation and performance,but it also faces some integration problems in the future.Through the analysis of one typical case,this paper believes that when traditional manufacturing enterprises choose cross-industry M&A as transformation measure,they need to pay attention to the following points:(1)selecting target company reasonably,clearing their own market position,and analyzing the target company’s industry in further;(2)increasing the integration efforts,docking the company resources of both sides,and enhancing the staff’s sense of identity;(3)making a great integration,valuating the target company reasonably,setting performance commitment and incentive mechanism;(4)formulating long-term strategy and clarifying the future development direction.