Research On The M&A Performance Of My Country’s Household Appliances Companies

Under the background of the new economy era,China’s economy is developing rapidly,the capital market is constantly growing,and the competition among enterprises is also getting fiercer.In order to occupy the market to a greater extent,and enhance market competitiveness,more and more companies are embarking on mergers and acquisitions.Through mergers and acquisitions,enterprises can achieve the purpose of asset integration and strength enhancement,and at the same time promote the effective allocation of social resources and the adjustment of industrial structure.Based on this,mergers and acquisitions activities have intensified,and few companies have changed the equity structure of listed companies to achieve the purpose of privatization and delisting of listed companies through mergers and acquisitions.Such incidents rarely occur in the domestic securities market,and more scholars are discussing cases related to the privatization of Chinese concept stocks withdrawing from overseas markets.The absorption and merger of Little Swan by Midea Group in 2019 is a typical case of privatization and delisting.As soon as the incident occurred,it caused an uproar in the capital market.Securities institutions,investors,and the management of related companies all voiced doubts.The China Securities Regulatory Commission also raised questions about the merger.Nevertheless,Midea Group has completed the absorption and merger of Little Swan and achieved the privatization and delisting of Little Swan.What does Midea Group’s move mean? Can the merger really bring positive economic benefits? This is the key point discussed in this article.As a leading company in the home appliance industry,Midea Group will be imitated by other companies in every move.The study of this case will help other companies make more informed choices,and it will also speed up government regulatory agencies to improve mergers and privatization and delisting related systems pace of.Through the analysis of M&A motivations and performance before and after M&A,the inevitability and significance of Little Swan’s privatization and delisting are discussed.According to the event analysis method,the cumulative excess return rate is always less than zero during the window period after the event announcement date,but it is gradually approaching zero.At the same time,the excess return rate changes from less than zero to greater than zero and then enters stable fluctuations.The empirical result also failed the significance test.This fully shows that the market did not react strongly to the Midea Group’s acquisition of Little Swan.From the perspective of the short-term performance of the merger,the case of Midea’s merger of Little Swan did not bring positive performance;through factor analysis,the merger was completed in 2019.The comprehensive factor score of 6.4121 for the year was ranked second,nearly 200% higher than the comprehensive score of 2018.It can be seen that the absorption and merger of Little Swan will significantly improve the mid-to long-term benefits of Midea Group.In summary,it can be concluded that when home appliance companies face severe market conditions,gradually increasing supervision,and bottlenecks in corporate development,privatization and delisting through mergers will help integrate resources,optimize management,improve systems,and strengthen Cooperation,in-depth coordination,reduction of agency costs,and enhancement of enterprises’ ability to deal with risks,etc.