Analysis On Motivation And Performance Of Continuous Mergers And Acquisitions Of Midea Group

In the background of the home appliance industry entering the bottleneck period,"Made in China 2025","Industry 4.0" and other relevant policies have pointed out the direction for enterprises.In order to adapt to the market and make future strategic deployment,enterprises have drawn their own development map.There are usually two ways for enterprises to grow.One is "connotation" development,which completely relies on their own exploration and takes the continuous improvement of innovative technology as the core development.Second,"extension" development,that is,through mergers and acquisitions to expand the territory.Compared with the shortcoming of long development time and easy to encounter bottleneck,M & A is favored by most enterprises.From this,continuous M & A refers to the behavior that the same enterprise successively M & A several enterprises,and the interval of each M &A is not very long.At the same time,cross-border mergers and acquisitions have become a boom in various fields around the world.Most enterprises hope to get foreign leading technologies as soon as possible by extending tentacles to overseas markets.At the same time,the extension of the market is also helpful for enterprises to realize their global operation strategy and find new profit growth points.It is not uncommon for listed companies in China to conduct single mergers and acquisitions,and even continuous mergers and acquisitions are of great benefit to the growth of Chinese enterprises and the development of capital market.As one of the leading enterprises in China’s home appliance industry,Midea Group can be regarded as a typical case of continuous cross-border mergers and acquisitions in terms of its own position,quantity and frequency of mergers and acquisitions.Therefore,this paper takes Midea as the object of study,analyzes the motivation of Midea’s continuous merger and acquisition,comprehensively uses financial analysis method and non-financial analysis method,and compares it with Haier and Gree,its powerful competitors in the industry,to analyze and study its performance both qualitatively and quantitatively,vertically and horizontally.This paper is divided into six chapters to elaborate the relevant background,theory,case,analysis and research,as well as the Suggestions drawn from it.The first chapter is the introduction,which summarizes the background of the merger and acquisition event and sorts out the existing literature.The second chapter elaborates the related concepts and motivations of continuous merger and acquisition.The third chapter firstly sorts out the background of China’s home appliance industry and the general situation of Midea Group,and then introduces the continuous M&A cases implemented by Midea Group to clarify the basic situation.The fourth chapter analyzes a series of behavioral motivations of Midea Group and makes an in-depth study from the perspective of enterprises.The fifth chapter is based on the above chapter,to carry on the multi-angle analysis of performance,and make a comprehensive evaluation for its advantages and disadvantages.The sixth chapter puts forward some suggestions for the development of Midea Group,and summarizes the experience and inspiration to the whole home appliance industry.From the comprehensive analysis of various indicators,continuous cross-border mergers and acquisitions do help Midea Group to realize part of the merger motivation,such as promoting the overall strategy,obtaining superior assets,and realizing international operations.Although most of the indicators are good and conducive to the development of the enterprise,there are still problems that need to be paid attention to and solved,such as: the recovery of profitability is not significant,the long-term debt paying ability is declining,the operating capacity needs to be improved,and the operating capacity in the indicators of development capacity fluctuates greatly.Furthermore,it puts forward some suggestions for the development of Midea Group,such as paying attention to and solving the problem of cultural integration in cross-border mergers and acquisitions,paying attention to its own capital structure and focusing on the overall level of interests in successive mergers and acquisitions.It also provides some enlightenment for China’s household appliance industry enterprises with similar situation when implementing such strategic layout in the future.